Creditors Are Interested in the Times Interest Earned Ratio Because

question 54

Multiple Choice

Creditors are interested in the times interest earned ratio 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:

Aggregated Behaviors

The sum or collection of individual actions or responses observed over a period of time, providing insights into overall patterns or trends.

Accurate

Correct in all details; exact.

Variables

Elements or factors that can change and affect the outcomes of scientific research or experiments, including independent, dependent, and control variables.

Consistency of Behavior

The degree to which an individual's actions, reactions, and behaviors remain stable over time.