The correct answer is A. High debt proportion.
Financial leverage is the use of debt to finance assets. It increases the potential return on equity, but also increases the risk of financial distress. A high degree of financial leverage means that a company has a lot of debt relative to its equity. This can be a good thing if the company is able to generate high returns on its assets, but it can be a bad thing if the company is not able to generate enough cash flow to cover its debt payments.
Option B is incorrect because a lower debt proportion means that a company has less debt relative to its equity. This would decrease the company’s financial leverage and make it less risky.
Option C is incorrect because equal debt and equity means that a company has the same amount of debt as equity. This would not be considered a high degree of financial leverage.
Option D is incorrect because no debt means that a company has no debt. This would be considered a low degree of financial leverage.