The Information Related to Interest Expense of Stereo Music Is

question 39

Multiple Choice

The information related to interest expense of Stereo Music is given below: $$\begin{array} { | l | r | } \hline \text { Net income } & \$ 255,000 \\\hline \text { Income tax expense } & 102,000 \\\hline \text { Interest expense } & 65,000 \\\hline\end{array}$$ Based on the above data, which of the following is the interest coverage ratio?

• A) 4.14 times
• B) 3.92 times
• C) 6.49 times
• D) 4.92 times

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Definitions:

Monopoly Power

The ability of a single seller to control market prices and exclude competitors within a particular market.

Tying Contracts

Agreements where the sale of one product (the tying product) is conditional on the purchase of a second, distinct product (the tied product).

Major Industry

Denotes a leading sector of the economy that plays a significant role in economic development, characterized by a high level of output and employment.

Restructuring

The process of reorganizing a company's structure, operations, or finances with the aim of making it more profitable or better organized for its present needs.