As the financial vice president for Squamish Equipment, you have the following information:

Calculate Squamish's times interest earned ratio for next year assuming the firm raises $50 million of new debt at an interest rate of 7 percent.

4.35

3.66

4.96

2.73

1.49

Squamish Equipment Selected financial information Next year's exp ected net incomeafter tax but before new financing Sinking-fund payments due next year on existing debt Inter est due next year on existing debt Company tax rate Common stock price, per share Common shares outstanding $50 million $15 million $16 million 38% $%25.00 20 million