Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company has earnings before interest and taxes of $2150215. They have annual interest charges on the long-term debt of $449914. Based on their interest

image text in transcribed
A company has earnings before interest and taxes of $2150215. They have annual interest charges on the long-term debt of $449914. Based on their interest coverage ratio, what will be the pretax cost of new long-term debt for them? Government bonds are currently yielding 2.2%. (One decimal place.) If interest coverage ratio is 3 4.25 5.5 6.5 8.50 sto 4.249999 5.499999 6.499999 8.499999 100000 Rating is A3/A- A2/A A1/A+ Aa2/AA Aaa/AAA Spread is 1.33% 1.18% 1.07% 0.85% 0.69%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sound Investing Uncover Fraud And Protect Your Portfolio

Authors: Kate Mooney

1st Edition

0071481826, 9780071481823

More Books

Students also viewed these Accounting questions

Question

What internal and external forces were influencing DigiTech?

Answered: 1 week ago