Debtors Are Interested in the Number of Times Interest Charges

question 44

Multiple Choice

Debtors are interested in the number of times interest charges are earned because they want to

• A)know what rate of interest the corporation is paying
• B)have adequate protection against a potential drop in earnings jeopardizing their interest payments
• C)be sure their debt is backed by collateral
• D)know the tax effect of lending to a corporation

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Definitions:

Hormone

Chemical messenger, produced in one part of the organism, that controls the activity of other tissues or organs in that organism.

Hypothalamus

A region of the brain that controls many bodily functions, including hunger, thirst, temperature regulation, and the release of many hormones.

Anterior Pituitary

Portion of the pituitary gland that is controlled by the hypothalamus and produces six types of hormones, some of which control other endocrine glands.

Arterial Duct

A blood vessel in a fetus that connects the pulmonary artery to the descending aorta, allowing most of the blood to bypass the fetus's developing lungs.