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Interest Is Big Valley's Only Fixed Cash Charge

Question 38

Multiple Choice

  Interest is Big Valley's only fixed cash charge. Big Valley's market value of equity to book value of debt ratio = 1.5.   Big Valley has a times interest earned ratio that is ________,which indicates that Big Valley has ________ long-term insolvency risk than the typical firm in the industry. A) 4; the same B) 3.91; less C) 3.91; more D) 4.58; more E) 4.58; less
Interest is Big Valley's only fixed cash charge.
Big Valley's market value of equity to book value of debt ratio = 1.5.
  Interest is Big Valley's only fixed cash charge. Big Valley's market value of equity to book value of debt ratio = 1.5.   Big Valley has a times interest earned ratio that is ________,which indicates that Big Valley has ________ long-term insolvency risk than the typical firm in the industry. A) 4; the same B) 3.91; less C) 3.91; more D) 4.58; more E) 4.58; less
Big Valley has a times interest earned ratio that is ________,which indicates that Big Valley has ________ long-term insolvency risk than the typical firm in the industry.


A) 4; the same
B) 3.91; less
C) 3.91; more
D) 4.58; more
E) 4.58; less

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