. Warner Company has the following balance sheet and income statement data on December

31^st, 2021:

Bonds Payable, 8% ( contractual rate and market rate )

Maturity date is December 31^st, 2025 $1,200,000

$8 Preferred Shares ( no change during the year ) 200,000

Common Shares ( no change during the year ) 1,000,000

Profit before income tax expense for the year 320,000

Income tax expense for the year 80,000

Common share dividends paid during the year 60,000

Preferred share dividends paid during the year 16,000

Based on the above data, what is the interest coverage ratio on December 31^st, 2021 ( round to two decimal places )?

1. 3.24
2. 3.50
3. 5.67
4. 4.33
5. None of the above.