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.)

1) Liabilities-to-equity ratio

2) Times-interest-earned ratio

3) Times burden covered

b) What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover:

1) Interest payment requirements?

2) Principal and interest requirements?

3) Principal, interest, and common dividend payments?