In 2016, Natural Selection, a nationwide computer dating service, had $516 million of assets and $208...

In 2016, Natural Selection, a nationwide computer dating service, had $516 million of assets and $208 million of liabilities. Earnings before interest and taxes were $128 million, interest expense was $28.6 million, the tax rate was 40 percent, principal repayment requirements were $24.8 million, and annual dividends were 20 cents per share on 21.2 million shares outstanding.

a. Calculate the following for Natural Selection: (Round your answers to 2 decimal places.)

Liabilities to equity ratio:

Times interest earned ratio:

Times Burden Covered:

b. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover: (Round your answers to 1 decimal place.)

Interest Payment Requirements:

Principal and Interest Requirements:

Principal Interest, and Common Dividend Payments:

Expert Solution

SOLUTION
(a) (i) and (ii)

(iii)

b (i) (ii)

(iii)

ekkarill92 answered 1 year ago

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