If the company does not maintain a tie ratio of at least 50


ABC Corp has 500,000 of debt outstanding, and it pays an interest rate of 10% annually. ABC annual sales are $2 million; its averagetaxerate is 20%; and its net profit margin is 5%. If the company does not maintain a TIE ratio of at least 5.0 times, its bank will refuse to renew the loan, and bankruptcy will result. What is ABC's tie ratio.

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Business Management: If the company does not maintain a tie ratio of at least 50
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