Borglum's objective is not to make a profitable acquisition. Borglum's objective is to assure a steady source of supply from a stable company. Borglum wants a company that it can be reasonably certain will not have financial problems and will be able to continue to operate. Thus, Western's high profit margin is not an advantage to Borglum. Furthermore, A company with a high degree of financial leverage has more risk of financial failure than a firm with lower leverage, so Western would not be the best acquisition. Borglum's objective is to assure a steady source of supply from a stable company. Borglum wants a company that it can be reasonably certain will not have financial problems and will be able to continue to operate. A company with a debt/equity ratio and degree of financial leverage that are higher than the industry average has more risk of financial failure than a firm with lower leverage, so Bond would not be the best acquisition. Borglum's objective is to assure a steady source of supply from a stable company. Borglum wants a company that it can be reasonably certain will not have financial problems and will be able to continue to operate. Rockland's low debt/equity ratio and degree of financial leverage give it stability that a firm with higher leverage does not have. It has less risk of financial failure than a firm with higher leverage would, so Rockland would be the best acquisition to fulfill Borglum's objective. This is not a true statement. One of the firms will fulfill Borglum's objective better than the others.
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