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Need an answer to the question below relatively quick! THanks An industrial company is currently rated A-. It has an EBIT of $500 million and
Need an answer to the question below relatively quick!
THanks
An industrial company is currently rated A-. It has an EBIT of $500 million and an interest expense of $75 million. Suppose (1) the median interest coverage ratio for an A- rated industrial company is 4.0x, and (2) current interest level for a 5-year A- rated industrial company is 5%, the company can take on the following amount of additional debt without jeopardizing its credit rating (other financial figures being normal):
a. | $2,000 million | |
b. | $1,600 million | |
c. | $1,200 million | |
d. | $800 million |
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