New debt at par with lower interest rate

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Reference no: EM131580865

A bond matures and the firm repays the $50 million face value of the debt and issues $50 million of new debt at par with a lower interest rate. Which of the following statements is true?

-The long-term debt ratio increases and times interest earned increases.

-Both the long-term debt ratio and times interest earned remain the same.

-The long-term debt ratio remains the same and times interest earned increases.

-The long-term debt ratio remains the same and times interest earned decreases

Reference no: EM131580865

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