12. Integrity Group, an association of venture capitalists, is considering using a leveraged buyout to purchase Schrag Co., a well-established high-tech firm. Schrag has long-term debt with a book value of $15 million and a debt to equity ratio of 1:10. The firm’s stock is currently selling at 120% of book value. Integrity Group has $25 million to contribute to the buyout and feels that it will have to offer a 25% premium over the stock’s current market price in order to make the deal work. Estimate Schrag’s capital structure after the leveraged buyout.