medium · Corporate Credit Analysis
A borrower's 'Covenant EBITDA' includes a $25 million add-back for 'synergies' that have not yet been realized.
If the firm uses this inflated EBITDA to pass a 2.0x Interest Coverage test, and actual GAAP EBITDA is only $18 million, what is the actual GAAP Interest Coverage if Cash Interest is $10 million?
- 0.7x
- 2.0x
- 4.3x
- 1.8x
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