Coverage Ratio: Trident Company Has Debt of $3

question 32

Multiple Choice

Coverage ratio: Trident Company has debt of $3.35 million with an interest rate of 6.875 percent. The company has an EBIT of $2,766,009. What is its times interest earned?

• A) 13 times
• B) 12 times
• C) 11 times
• D) None of the above

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Definitions:

Financial Markets

Platforms or systems that facilitate the trading of financial instruments such as stocks, bonds, currencies, and derivatives, allowing for the allocation of resources over time.

Long-Term Securities

Financial instruments or investments that are meant to be held or mature over a period longer than one year.

Capital Markets

Markets where individuals and institutions trade financial securities, including stocks and bonds, over long periods.

Maturities

The specific dates on which the principal or nominal amounts of financial instruments like bonds or loans are due to be paid to holders.