medium · Investment Banking
An analyst is comparing two companies. Company X has $500.0M in Debt and $100.0M in EBITDA. Company Y has $800.0M in Debt and $200.0M in EBITDA.
Which company is less levered?
- Company X, because it has less absolute debt.
- Company Y, because its leverage ratio is 4.0x.
- Company X, because it has a lower Interest Coverage ratio.
- They are equally levered.
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