A Times-Interest-Earned of 0

question 69

True/False

A times-interest-earned of 0.9 means that interest will not be paid.

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Definitions:

Acquiring Firm

A company that purchases a majority interest in another company to take control of it.

Parent

A company that holds a controlling interest in one or more subsidiaries, or an individual who has a child.

Subsidiary

A company that is controlled by another company, known as the parent company, through majority share ownership.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize the impact of any single asset's performance.