A times interest earned ratio indicates that:
A)preferred stock has no maturity date.
B)the debt will never become due.
C)the firm will be able to repay the principal when due.
D)the principal can be refinanced.
E)none of the answers are correct.

Question

Quizplus · Accepted Answer

The times interest earned ratio is a measure of a company's ability to meet its interest payments on outstanding debt, not directly related to preferred stock maturity, debt maturity, principal repayment ability, or refinancing options.

A Times Interest Earned Ratio Indicates That