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XYZ Corporation has total capital of $8,000,000 and forecasts next year's EBIT to be $600,000. The firm can borrow at 10% and wants to maintain

XYZ Corporation has total capital of $8,000,000 and forecasts next year's EBIT to be $600,000. The firm can borrow at 10% and wants to maintain a minimum TIE ratio of 3. Using the operating income method, what is maximum debt-to-capital ratio XYZ Corporation can carry and still meet its TIE ratio of 3 times?

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