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Need answers ASAP and the right one. 3. Suppose that the financial ratios of a potential borrowing firm take the following values: Working capital/Total assets
Need answers ASAP and the right one.
3. Suppose that the financial ratios of a potential borrowing firm take the following values: Working capital/Total assets ratio (X1)=0.7 Retained earnings/Total assets ratio (X2)=0.2 Earnings before interest and taxes/Total assets ratio (X3)=0.1 Market value of equity/Book value of total liabilities (X4)=0.05 Sales/Total assets ratio (X5)=0.5 Which of the following is correct? A. Altman's Z score for the borrower is 1.915 B. The probability of default for the borrower is 1.98% C. Altman's Z score for the borrower is 1.98 D. The borrower is considered a high default risk borrower E. The borrower is considered a low default risk borrowerStep by Step Solution
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