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Which of the firms below is likely to receive the most favorable terms when borrowing money...

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Finance

Which of the firms below is likely to receive the most favorableterms when borrowing money from the bond market?

Firm A: cash coverage ratio = 0.6 and debt-to-equity ratio =1.2

Firm B: cash coverage ratio = 0.8 and debt-to-equity ratio =1.5

Firm C: cash coverage ratio = 1.5 and debt-to-equity ratio =0.6

Firm D: cash coverage ratio = 1.2 and debt-to-equity ratio =0.8

Answer & Explanation Solved by verified expert
4.5 Ratings (883 Votes)
HIGHER CASH COVERAGE INDICATES THAT COMPANY IS    See Answer
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Which of the firms below is likely to receive the most favorableterms when borrowing money from the bond market?Firm A: cash coverage ratio = 0.6 and debt-to-equity ratio =1.2Firm B: cash coverage ratio = 0.8 and debt-to-equity ratio =1.5Firm C: cash coverage ratio = 1.5 and debt-to-equity ratio =0.6Firm D: cash coverage ratio = 1.2 and debt-to-equity ratio =0.8

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