Question
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
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.)
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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?%
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