In 2016, Natural Selection, a nationwide computer dating service, had $506 million of assets and $203 million of liabilities. Earnings before interest and taxes were $123 million, interest expensewas $28 million, the tax rate was 40 percent, principal repayment requirements were $24 million, and annual dividends were 20 cents per share on 21 million shares outstanding.a. Calculate the following for Natural Selection: (Round your answers to 2 decimal places.)Liabilities-to-equity ratioTimes-interest-earned ratioTimes burden coveredb. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover: (Round your answers to 1 decimal place.)Interest payment requirements?Principal and interest requirements?%%Principal, interest, and common dividend payments?%

The questions pertain to the various financial ratios specifically solvency ratios. It determines…

Answered: In 2016, Natural Selection, a…

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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