Comwell Real Estate Speculators, Inc., and the Northern California Electric Utility Company have the following EBITs and debt-servicing burdens:

Northern Corn well California Expected EBIT Annual interest Annual principal payments on debt ( 2,000,000 35,000,000 304 Part I11 Financing and Dividend Policies The tax rate for Cornwell is 40 percent; for Northern California Electric Utility, 36 percent. Compute the times interest earned ratio and the debt-sewice coverage ratio for the two companies. With which company would you feel more comfortable if you were a lender? Why?