A potential bondholder is considering four companies for investment. Company 4 has an interest earned times ratio of 14.3.
A bondholder is a buyer or owner of debt securities, often issued by governments and corporations. Bond issuers essentially borrow money from bondholders. When bonds mature, bondholders are paid their initial investment or principal. Government (government) bonds, such as those issued by the US Treasury, are issued by states and municipalities.
Companies issue corporate bonds. Municipalities issue municipal bonds. Freddie Mac and Fannie Mae are two examples of government-affiliated companies that issue agency bonds. The investor, also known as the bondholder, is given a regular interest payment known as a coupon as compensation for purchasing the bonds. An investor should receive consistent, predictable income from coupon payments that can be made quarterly, biannually, or annually.
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