Question
You are analyzing the leverage of two firms and you note the following (all values in millions of dollars): Debt Book Equity Market Equity Operating
You are analyzing the leverage of two firms and you note the following (all values in millions of dollars):
| Debt | Book Equity | Market Equity | Operating Income | Interest Expense | |
| Firm A | 495.4 | 303.7 | 397.1 | 104.8 | 49.3 |
| Firm B | 80.1 | 30.5 | 42.5 | 7.8 | 6.9 |
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?
d. Which firm may have more difficulty meeting its debt obligations? Explain.
a. What is the market debt-to-equity ratio of each firm?
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Practical Finance For Property Investment
Authors: Craig Furfine
1st Edition
036733304X, 978-0367333041
