Question $2$

$3$ Point

Which ratio would you use to determine Traditional Home's ability to pay lenders their interest payments? With respect to the firm's ability to cover its interest expense, Traditional Home is $q,$

total debt ratio; better able to cover its interest expense

total debt ratio; less able to cover its interest expense

times interest earned, better able to cover its interest expense

times interd $\frac{1}{2}t$ earned; less able to cover its interest expense