Leverage Ratios. Lever Age pays an 8 percent coupon on outstanding debt with face value $10 million.
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Leverage Ratios. Lever Age pays an 8 percent coupon on outstanding debt with face value
$10 million. The firm’s EBIT was $1 million.
a. What is times interest earned?
b. If depreciation is $200,000, what is cash coverage?
c. If the firm must retire $300,000 of debt for the sinking fund each year, what is its “fixedpayment cash-coverage ratio” (the ratio of cash flow to interest plus other fixed debt payments)?
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Related Book For 
Study Guide To Accompany Fundamentals Of Corporate Finance
ISBN: 9780073012421
5th Edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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