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You are analyzing the leverage of two firms and you note the following (all values in millions of dollars): Firm A Firm B Debt

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You are analyzing the leverage of two firms and you note the following (all values in millions of dollars): Firm A Firm B Debt 499.1 81.4 Book Equity 299.1 a. What is the market debt-to-equity ratio of each firm? b. What is the book debt-to-equity ratio of each firm? c. What is the EBIT/interest coverage ratio of each firm? 36.3 d. Which firm may have more difficulty meeting its debt obligations? Explain. a. What is the market debt-to-equity ratio of each firm? The market debt-to-equity ratio for Firm A is (Round to two decimal places.) Market Equity EBIT Interest Expense 404.4 109.1 37.3 8.4 50.5 7.1

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