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Question
| Waltham Watch | Comparable Firms | |
| Debt ratio | 33% | 42% |
| Interest -bearing debt ratio | 19% | 23 |
| Times interest earned ratio | 25 | 20 |
| EBITDA coverage ratio | 6 | 4 |
From the table above we can conclude:
A) Waltham has a conservative capital structure policies.
B) Waltham has too much debt.
C) Waltham uses more leverage than the typical firm in its industry.
D) Waltham's EPS would be more sensitive than a typical firm's to changes in EBIT.
Answer
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