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Explain why a firm debt ratio -other relevant factors

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Question - Vincent does not believe that Helping Hand is overleveraged at present. Part of her argument involves calculation of the firm's debt, times interest earned (TIE), and fixed charge coverage (FCC) ratios. Explain why a firm's debt ratio -other relevant factors the same - will be overstated during a period of rising interest rates if it is calculated from information on the balance sheet.

Reference no: EM133013697

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