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a. Calculate a measure of times-interest-earned for the industry. b. Calculate a measure of times-interest-earned for each company. c. Calculate the average of the times-interest-earned ratios for the individual companies.

a. Calculate a measure of times-interest-earned for the industry. b. Calculate a measure of times-interest-earned for each company. c. Calculate the average of the times-interest-earned ratios for the individual companies.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Exercise n°1. Here are some data for five companies in the same industry: Company Code A в D E EBIT 10 30 100 -3 80 Interest expense5 15 50 1 a. Calculate a measure of times-interest-earned for the industry. b. Calculate a measure of times-interest-earned for each company. c. Calculate the average of the times-interest-earned ratios for the individual companies. d. Does changing the method of calculation make a significant difference to the end result?
Transcribed Image Text:Exercise n°1. Here are some data for five companies in the same industry: Company Code A в D E EBIT 10 30 100 -3 80 Interest expense5 15 50 1 a. Calculate a measure of times-interest-earned for the industry. b. Calculate a measure of times-interest-earned for each company. c. Calculate the average of the times-interest-earned ratios for the individual companies. d. Does changing the method of calculation make a significant difference to the end result?
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