Trendy Ltd's Net Profit After Tax Was $1,200 and Its

question 53

Multiple Choice

Trendy Ltd's net profit after tax was $1,200 and its interest expense was $400. Assuming corporate tax is $400, what is the company's interest cover ratio?

• A)1.8.
• B)3.0.
• C)5.0.
• D)1.2.

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Definitions:

Ask Price

The lowest price at which a seller is willing to sell a financial instrument or commodity.

Coupon Payments

Regular interest payments made to the holders of a bond, typically paid semi-annually or annually, based on the bond's coupon rate.

Interest Rates

The amount charged by lenders as a percentage of the principal, or the amount earned on an investment over a specific period.

Bond Prices

The market price at which a bond is currently trading, influenced by factors such as interest rates, credit quality, and maturity date.