medium · Debt Capital Markets credit-ratings-risk
An analyst is adjusting the financial statements of a retailer for credit analysis. The retailer reports EBITDA of $400 million and total debt of $1,200 million. It has annual rent expense of $100 million.
Using a standard 8x capitalization multiple for operating leases, what is the adjusted leverage ratio?
- 4.25x
- 5.0x
- 4.0x
- 3.0x
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