If a Firm's Times-Interest-Earned (TIE) Ratio Decreases, the Probability That

question 7

True/False

If a firm's times-interest-earned (TIE) ratio decreases, the probability that it will default on its outstanding debt also decreases. 

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Definitions:

Negligence Action

A negligence action is a legal claim brought in court when one party sues another for harm caused due to their failure to exercise the level of care that a reasonable person would in similar circumstances.

Duty Of Care

The duty of all persons, as established by tort law, to exercise reasonable care in dealings with others. Failure to exercise due care, which is normally determined by the reasonable person standard, is the tort of negligence.

Breach

The failure to comply with or meet a legal duty, contract, or obligation.

Legally Recognizable Injury

Legally recognizable injury is a type of harm identified by law as a valid basis for a lawsuit.