QUESTION 11

Balance sheet and income statement data indicate the following:

Bonds payable, 10% (issued 1988 due 2012)

$1,000,000

Preferred 5% stock, $100 par (no change during year)

300,000

Common stock, $50 par (no change during year)

2,000,000

Income before income tax for year

350,000

Income tax for year

80,000

Common dividends paid

50,000

Preferred dividends paid

15,000

Based on the data presented above, what is the number of times bond interest charges were earned (round to one decimal point)?

3.7

4.4

4.5

3.5

2 points