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Santas Village Inc. has sales of $140mm, a gross margin of 30%, fixed costs (excluding depreciation) of $22mm, depreciation of $5mm, pays $10mm in interest

Santas Village Inc. has sales of $140mm, a gross margin of 30%, fixed costs (excluding depreciation) of $22mm, depreciation of $5mm, pays $10mm in interest expense, and has a 40% effective tax rate. What is its Interest coverage rate?

a. 1.5x

b. 2.0x

c. 0.3x

d. 4.2x

e. 0.5x

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