Final answer:
An increase in intangible assets will have a positive impact on the asset coverage ratio.
Step-by-step explanation:
An increase in intangible assets will have a **positive impact** on the asset coverage ratio, holding all other accounts that impact this ratio constant. The asset coverage ratio measures the firm's ability to cover its debt obligations with its assets. When intangible assets increase, the firm's total assets will also increase, which will improve the asset coverage ratio.
For example, if a company acquires a patent or a valuable brand, it will report higher intangible assets on its balance sheet. This increase in intangible assets will boost the value of the firm's total assets, increasing the asset coverage ratio. This improvement indicates that the firm has more assets to rely on to fulfill its debt obligations.
In summary, an increase in intangible assets will have a **positive impact** on the asset coverage ratio, as it enhances the firm's ability to cover its debts with its assets.