Explain what the following ratios tell you about a company’s financial health: debt to equity ratio and interest coverage ratio.
Answer to relevant QuestionsExplain what loan covenants are and why they are used. Distinguish between the contract rate of interest on a bond and the yield (or effective rate). Sawada Insurance Ltd. issues bonds with a face value of $100 million that mature in 12 years. The bonds carry a 6% interest rate and are sold at 104.35 to yield 5.5%. They pay interest semi-annually. Required: a. Calculate ...Companies have to accrue the cost and record the present obligation for post-employment benefits. In the past, the cost of these benefits was simply recorded as it was incurred, which was known as the pay-as-you-go ...A shareholder recently charged that the financial statements of a company in which he owned shares were false and misleading because a large amount of computer equipment, which the company leased from a financial institution ...
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