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4 points QUESTION 21 1. Steven's Sox Inc has a coverage ratio of 5. Eleanor's Elegant Earrings' coverage ratio is 7. Yet Steve's pays a

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4 points QUESTION 21 1. Steven's Sox Inc has a coverage ratio of 5. Eleanor's Elegant Earrings' coverage ratio is 7. Yet Steve's pays a lower risk premium on its debt than does Eleanor's (for the same maturity). What might explain this? A Steve's is in a more volatile industry. B Eleanor's is in a more volatile industry. C Interest rates are low today. When rates rise, Steven's risk premium will jump Eleanor's. D Steven's interest rate is below that of the U.S. Treasury, Eleanor's rate is above." E Nothing to explain. A lower coverage ration should result in a lower risk premium

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