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Alumbat Health has $800,000 of debt outstanding, and it pays an interest rate of 10 percent annually on its bank loan. Alumbat's total revenues are
| Alumbat Health has $800,000 of debt outstanding, and it pays an interest rate of 10 percent |
| annually on its bank loan. Alumbat's total revenues are $3,200,000; its average tax rate is 40 |
| percent; and its total margin is 6 percent. If the company does not maintain a TIE ratio of at |
| least four times, its bank will refuse to renew its loan, and bankruptcy will result. What is |
Alumbat's current TIE ratio? |
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
8th Canadian Edition
01259270114, 9781259270116
