Compute interest without breaching indenture restriction

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Reference no: EM1364910

Company has $100 million of 13% debentures outstanding. The indenture (loan covenants) limits additional borrowing such that the total interest coverage (EBIT/interest) is at least 3 times. Company's EBIT last year was 52 million. How much could Company borrow under a term loan at 13% interest without breaching the indenture restriction?

Reference no: EM1364910

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