CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

The key credit metric for revenue-backed municipal bonds is the ______.

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
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