Answer to Question #11933 in Economics of Enterprise for Tammy
a. Company HD has a lower equity multiplier.
b. Company HD has more net income.
c. Company HD pays more in taxes.
d. Company HD has a lower ROE.
e. Company HD has a lower times interest earned (TIE) ratio
ratio. TIE ratio is a metric used to measure a company's ability to meet its
debt obligations. It usually indicates how many times a company can cover its
interest charges on a pretax basis. Company HD has a higher debt ratio and,
therefore, a higher interest expense. Failing to meet debt obligations could
force a company into bankruptcy.
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