- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 15. Credit Analysis for Government Issuers
- Subject 2. Non-Sovereign Credit Risk
CFA Practice Question
The key credit metric for revenue-backed municipal bonds is the ______.
B. debt service coverage ratio
C. cash available for debt service (CADS)
A. interest coverage ratio
B. debt service coverage ratio
C. cash available for debt service (CADS)
Correct Answer: B
A is used to determine how easily a company can pay interest on outstanding debt. It is equal to EBIT / interest expense. C is the amount of cash a company has on hand, as compared to its debt service obligations.
User Contributed Comments 1
| User | Comment |
|---|---|
| johntan1979 | DSCR = EBIT/Total debt service |