What is the market debt-to-equity ratio of each firm what


You are analyzing the leverage of two firms and you note the following (all values in millions of dollars):

                     Debt                  Book Equity        Market Equity       Operating Income                Interest Expense

Firm A        495.5495.5         297.6297.6          402.1402.1          106.7106.7                         54.654.6

Firm B        83.183.1        36.436.4        41.841.8           7.97.9                        7.17.1

a. What is the market debt-to-equity ratio of each firm?

b. What is the book debt-to-equity ratio of each firm?

c. What is the interest coverage ratio of each firm?

d. Which firm may have more difficulty meeting its debt obligations? Explain.

a. What is the market debt-to-equity ratio of each firm? The market debt-to-equity ratio for Firm A is . (Round to two decimal places.)

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