Which statement is correct about the financial leverage of a company with an equity base of $400,000?
a. A company that borrows $150,000 is more leveraged than a company that borrows $250,000.
b. The return on equity of the company will be higher if it has a lower leverage.
c. The return on equity of the company will be lower if it has a higher leverage.
d. A company that borrows $250,000 is more leveraged than a company that borrows $150,000.
e. The return on equity of the company is unaffected by the financial leverage.