Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, I answered this question, but when I checked it, it said that the answer was wrong. I would appreciate it if you checked it

Hello, I answered this question, but when I checked it, it said that the answer was wrong. I would appreciate it if you checked it and told me the correct answer.image text in transcribed. Unfortunately, I only can check it one time. Thanks

In 2016, Natural Selection, a nationwide computer dating service, had $536 million of assets and $218 million of liabilities. Earnings before interest and taxes were $138 million, interest expense was $29 million, the tax rate was 40 percent, principal repayment requirements were $25.8 million, and annual dividends were 30 cents per share on 20 million shares outstanding. a. Calculate the following for Natural Selection: (Round your answers to 2 decimal places.) Liabilities-to-equity ratio Times-interest-earned ratio Times burden covered 2.46 4.76 1.92 b. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover: (Round your answers to 1 decimal place.) Interest payment requirements? Principal and interest requirements? Principal, interest, and common dividend payments? 83.01% 48.01% 82.01%

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

Students also viewed these Finance questions