I don’t know but I hope you have a good day
Answer:
B. Suppose a firm wants to maintain a specific TIE ratio. It knows the amount of its debt, the interest rate on that debt, the applicable tax rate, and its operating costs. With this information, the firm can calculate the amount of sales required to achieve its target TIE ratio.
Explanation:
The times interest earned (TIE) ratio measures the company's ability to meet its debt obligations from its current income. The formula for calculating TIE number is 'earnings before interest and taxes (EBIT) divided by the total interest payable on all debts.
With the above definition and formula in mind it becomes <u>true</u> that if a firm wants to maintain a specific TIE ratio, If it knows the amount of its debt, the interest rate on that debt, the applicable tax rate, and its operating costs. With this information, the firm can calculate the amount of sales required to achieve its target TIE ratio, because;
With the parameters 'If it knows the amount of its debt, the interest rate on that debt,' It will work out total interest on all debts which is the denominator of TIE.
AND
With the parameters 'the applicable tax rate, and its operating costs' it will work out the Earnings Before Interest and Taxes'
Answer:
[89, 106]
Explanation:
Call Strike Price (Xc) = 100
Put Strike price (Xp) = 95
c = 5, p = 2
In case of a long strangle, which means 1 long call and 1 long put.
Payoff at expiration = Max (0, ST-100) + Max (0, 95-ST) - 7
Strangle would lead to a loss if ST falls in the range between 89 and 106.