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The following table shows some financial data for two companies:

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The following table shows some financial data for two companies;A B;Total Asset $1,552.10 $1,565.70;EBITDA -60 70;Net Income + interest -80 24;Total Liabilities 814 1537.10;Calculate which has the higher probability of default.;Use the formula shown in Section 23-4 to calculate which has the higher probability of default.;= -6.445 ? 1.192ROA + 2.307liabilities/assets-.346(-.025) = -4.32;Relative chance of failure = e (-4.32)=.013

 

Paper#33885 | Written in 18-Jul-2015

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