The Docksider Has Net Income for the Most Recent Year

question 44

Multiple Choice

The Docksider has net income for the most recent year of $24,650 and a combined tax rate of 24 percent. The firm paid $1,800 in total interest expense and deducted $2,900 in depreciation expense. What was the cash coverage ratio for the year?

• A) 20.48 times
• B) 11.48 times
• C) 19.39 times
• D) 20.63 times
• E) 13.69 times

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Definitions:

No-Par Value

Refers to stocks issued without a specified face value, where the value is determined by the market.

In-Kind

Refers to goods, services, or transactions made in the form of physical goods or commodities rather than money.

Leveraged Buyout

A leveraged buyout is a financial transaction where a company is purchased primarily with borrowed funds, using the assets of the company being acquired as collateral.

Corporate Stock

Shares of ownership in a corporation, representing a claim on part of the corporation's assets and earnings.