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Preferred stock with an annual dividend

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When calculating Interest coverage for a FRITCO analysis of risk how would determine the Interest Coverage if you had a 5 million dollar loan at 8% annual interest with a modified EBIT of 2.6, Depreciation of 1.0 and existing interest of 0.5.  If you could please explain all of the numbers and why they go where they do that would be great.  The answer is 3.33 but I can't figure out why.  And how would this differ if you had the same EBIT, Depreciation and existing interest but instead had 5 million in preferred stock with an annual dividend of $475,000.

Reference no: EM131412261

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