## Answers

A is correct. The value of assets in relation to the level of debt is important to assess the collateral of the company; that is, the quality and value of the assets that support the debt levels of the company.

B is correct. Growth prospects of the industry provides analyst some insight about the capacity of the company.

Option B is correct. Though WACC might have decreased due to debt financing. The FFO is the backbone to repay the interest obligations.

And if they decline the conditions to repay worsens.

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