The debt ratio of Company A is .31 and the debt ratio of Company B is .21. Based on this information, an investor can conclude:
A. Both companies have too much debt.
B. Company B has a lower risk from its financial leverage.
C. Company A has 10% more assets than Company B.
D. Company A has a lower risk from its financial leverage.
E. Company B has more debt than Company A.
Answer: B
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