Fairmont Golf issued fixed rate debt when interest rates were 6 percent. Rates have since risen to 7…

/in /by

Fairmont Golf issued fixed rate debt when interest rates were 6 percent. Rates have since risen to 7 percent. Using the values reported on the financial statements would most likely cause an analyst to

a. overestimate Fairmont’s economic liabilities.

b. underestimate Fairmont’s economic liabilities.

c. underestimate Fairmont’s interest coverage ratio.