Suppose that a firm has both fixed-rate and floating-rate debt outstanding. What effect will a decline in interest rates have on the firm’s times-interest-earned ratio? What about the ratio of the market value of debt to that of equity? Would you judge that leverage has increased or decreased?

Suppose
that a firm has both fixed-rate and floating-rate debt outstanding. What effect
will a decline in interest rates have on the firm’s times-interest-earned
ratio? What about the ratio of the market value of debt to that of equity?
Would you judge that leverage has increased or decreased?

Last Completed Projects