According to the information in the table below, which of the following shows Debt/Equity (D/E) ratio and Interest Coverage ratio (ICR) correctly. Long Term Debt 50,000 EBIT(Operating profit) 75,000 Shareholders' Equity 40,000 Interest expenses 15,000 Total Assets 140,000
According to the information in the table below, which of the following shows Debt/Equity (D/E) ratio and Interest Coverage ratio (ICR) correctly. Long Term Debt 50,000 EBIT(Operating profit) 75,000 Shareholders' Equity 40,000 Interest expenses 15,000 Total Assets 140,000
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
Problem 1PS
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According to the information in the table below, which of the following shows Debt/Equity (D/E) ratio and Interest Coverage ratio (ICR) correctly.
| Long Term Debt | 50,000 |
| EBIT(Operating profit) | 75,000 |
| Shareholders' Equity | 40,000 |
| Interest expenses | 15,000 |
| Total Assets | 140,000 |
Select one:
a. D/E= 1.25% and ICR=5%
b. D/E=1.25 and ICR=3.3 times
c. D/E=1.25 and ICR=5 times
d. D/E=0.80 and ICR=2.5 times
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