A company is trying to evaluate its debt capacity, and the following information is available: The company's
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Question:
A company is trying to evaluate its debt capacity, and the following information is available:
- The company's earnings before interest and taxes (EBIT) is $100,000.
- The company's interest expense is $10,000.
- The company's tax rate is 30%.
What is the company's debt capacity, and what is its interest coverage ratio?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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