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Posted on Aug 05, 2024

Moon has currently $ 5 0 million in debt bearing 1 0 % interest.. Its dividend is $ 2 million and transfer to retained earnings

Moon has currently $ $50$ million in debt bearing $10 %$ interest.. Its dividend is $ $2$ million and transfer to retained earnings is $ $10$ million. Tax rate is $40 % .$ What is the present times interest earned $($ TIE $)$ ratio? How much additional debt at $10 %$ interest rate can the firm issue and maintain its TIE ratio at $3.5 ?$

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