Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What best explains why a firm's ratio of long-term debt/total capital is lower than the industry average, while the ratio of income before interest and

What best explains why a firm's ratio of long-term debt/total capital is lower than the industry average, while the ratio of income before interest and taxes/debt interest charges is higher than the industry average?

A.The firm has a high ratio of current assets/current liabilities.

B.The firm pays lower interest on long-term debt than the average firm.

C.None of the options are correct.

D.The firm has more short-term debt than average.

E.The firm has a high ratio of total cash flow/long term debt.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jeff Madura

5th edition

132994348, 978-0132994347

More Books

Students also viewed these Finance questions

Question

Describe t he t wo m ain t ypes of ex ercise. (p. 1 84)

Answered: 1 week ago

Question

if e^z= 13.8, what is the value of z

Answered: 1 week ago