The only debt a firm has outstanding is a $10 million,8 percent bond issue.If their earnings before taxes are $5.2 million,then their times-interest-earned ratio would be:
A) 5.5
B) 6.5
C) 7.5
D) None of the above

Name: The only debt a firm has outstanding is a $10 million,8 percent bond issue.If their earnings before taxes are $5.2 million,then their times-interest-earned ratio would be: A) 5.5 B) 6.5 C) 7.5 D) None of the above
Brand: Quizplus
Rating: 4.7 (31 reviews)

Question

Quizplus · Accepted Answer

(5.2+.08*10)/(10*.08)= 7.5

The Only Debt a Firm Has Outstanding Is a $10