The higher the times interest earned ratio, the better the creditors' protection. True False
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- An increase in interest rates would mostly harm the ___. 1. creditors 2. debtors 3. lenders 4. providers of fundsWhen the effective rate falls due to good credit, the fair value of the bond payable reflects a higher amount, producing a loss. How is this loss accounted for?.How much is the estimated deficiency to unsecured creditors?
- What is an earnings management benefit from showing an increased figure for bad debt expense?Credit risk is defined as the inability of _________to meet their debt obligations. For _______the risk includes_____ of principal and interest, cash flow ________, and_________collection costs. Thus, higher credit risk is associated with higher ______ costs.If a firm is interested in the current cost of its debt obligations, then it can simply look at the contractual rate of interest due to lenders on those obligations. True False
- Which of the following does not relate to credit risks? a. Credit risk is the possibility of losing a lender takes on due to the possibility of a borrower not paying back a loan b. It refers to the risk that a lender may not receive the owed principal and interest c. Credit risk also describes the risk that an insurance company will be able to pay a claim. d. Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations e. Credit risk describes the risk that a bond issuer may fail to make payment when requested16. What do you call for the likelihood of loss due to customers are not paying their amounts owing? a. Discount risk b. Credit risk c. Payment risk d. Loss riskHow much is the net free assets? How much is the estimated deficiency to unsecured creditors? What is the estimated recovery percentage of unsecured non-priority creditors?
- A lender is a creditor. Group of answer choices True False The distressed market is efficient. Group of answer choices True FalseEarly extinguishment of debt often produces a gain or a loss. How is the gain or loss determined?Which of the following does not relate to credit risks? Select one: A. Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations B. Credit risk also describes the risk that an insurance company will be able to pay a claim. C. It refers to the risk that a lender may not receive the owed principal and interest D. Credit risk describes the risk that a bond issuer may fail to make payment when requested E. Credit risk is the possibility of losing a lender takes on due to the possibility of a borrower not paying back a loan