Given the following data: ROA = 10%; total liabilities = 90% of the assets; EBITDA =
10% of liabilities. Calculate the relative chance of failure using the following model:
Log(relative chance of failure) = -6.445 - 1.192 ROA + 2.307 (liabilities/assets) -
0) 346(EBITDA/liabilities)
A) 1.7%
B) 1.09%
C) 0.16%
D) none of the above
Correct Answer:
Verified
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