Consolidated Industries has total interest charges of $20,000 per year. Sales of $2 million generated an operating income of $220,000 and an after-tax profit of 6% of sales. The firm has a marginal tax rate of 40%
What is the firm's times-interest-earned ratio?
A) 10
B) 11
C) 12
D) 13
Answer: B
Business
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In an article titled "CUNA Mutual Looks for Noncallable Corporates" that appeared in the November 4, 1991, issue of BondWeek, p
6, Joe Goglia, a portfolio manager for CUNA Mutual Insurance Group, stated that he invests in "planned amortization class tranches, which have less exposure to prepayment risk and are more positively convex than other mortgage-backeds." Is this true?
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Why do investors sometimes demand risk premiums when investing?
What will be an ideal response?
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