What is macs current times interest earned ratio

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Mac Inc. is considering issuing additional long-term debt to finance an investment opportunity. Currently, Mac has $180 million in 14% debt outstanding. Its after-tax net income is $63 million, and the company is in 30 percent tax bracket. What is Mac's current times interest earned ratio?

Continued Mac Inc. is required by debt holders to maintain its times earned interest ratio at 3.2 or greater. How much additional 14% debt can Mac issue now to maintain its time interest earned ratio at 3.2? Assume for this calculation that earnings before interest and taxes remains at its present level.

 

Reference no: EM13272058

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