10. In 2004, Natural Selection, a nationwide computer dating service, had $200 million of assets and $80 million of liabilities. Earnings before interest and taxes were $50 million, interest expense was $12 million, the tax rate was 40 percent, principal repayment requirements were $10 million, and annual dividends were 25 cents per share on 10 mil- lion shares outstanding.

a. Calculate: (1) Natural Selection's liabilities-to-equity ratio (2) Times interest earned ratio (3) Times burden covered

b. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover (1) Principal repayment requirements (2) Common dividend payments?