NAIMMCQ Economics For a company with total debt of $60 million, most of which is short-term, how will a sharp increase in interest rates affect the company's interest coverage ratio?

For a company with total debt of $60 million, most of which is short-term, how will a sharp increase in interest rates affect the company's interest coverage ratio?

Economics

For a company with total debt of $60 million, most of which is short-term, how will a sharp increase in interest rates affect the company's interest coverage ratio?

A) Interest coverage ratio will increase
B) Interest coverage ratio will decline
C) Interest coverage ratio will not be affected
D) It will cause EBIT to increase

Answer: B

NAIMMCQ

For a company with total debt of $60 million, most of which is short-term, how will a sharp increase in interest rates affect the company's interest coverage ratio?

For a company with total debt of $60 million, most of which is short-term, how will a sharp increase in interest rates affect the company's interest coverage ratio?

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