You are analyzing the leverage of two firms and you note, Ask an Expert

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You are analyzing the leverage of two firms and you note the following (all values in millions of dollars):

	Debt	Book Equity	Market Equity	EBIT	Interest Expense
Firm A	500	300	400	100	50
Firm B	80	35	40	8	7

What is the market debt-to-equity ratio of each firm?
What is the book debt-to-equity ratio of each firm?
What is the EBIT/interest coverage ratio of each firm?
Which firm may have more difficulty meeting its debt obligations? Explain.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9792067

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