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@sing its target capital structure of !#* debt" the company must have debt of:

7 = wd8 = #1!#(!"!0"-01-

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7etermine the times interest earned ratio for each probability1 4hat is the probability ofnot covering the interest payment at the !#* debt level5

!#* debt: T&$ =&

$%&T = '1!)-"2#

$%&T1

,robability T&$#1# ( 10-)

#1-# -10 #10# 21 #1-# 1! #1# '1