Fayer Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $4,500.The market price of common stock at the end of Year 2 was $10.88 per share. The company's times interest earned for Year 2 is closest to:

Question

Fayer Corporation has provided the following financial data:   Dividends on common stock during Year 2 totaled $4,500.The market price of common stock at the end of Year 2 was $10.88 per share. The company's times interest earned for Year 2 is closest to:

Quizplus · Accepted Answer

Times interest earned = Net operating income ÷ Interest expense
= $70,154 ÷ $14,000 = 5.01 (rounded)

Fayer Corporation Has Provided the Following Financial Data