A medium size firm is considering the issuance of

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A medium size firm is considering the issuance of additional long-term debt to finance expansion. At the present time the company has $160 million of 10% bonds outstanding. Its after-tax net income is $48 million, and the company's (marginal) income tax rate is 40%. The company is required by the bond holders to maintain its times interest earned ratio at 4.0 or greater. Determine the firm's current times interest earned ratio.

Reference no: EM13617929

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