Bitsy Betsy, Inc. has the following capital structure:

Current liabilities $ 35,000,000 Long-term debt 35,000,000 Preferred stock (no par) 45,000,000 Common stock (no par) 45,000,000 Retained earnings 10,000,000 Total liabilities and shareholders’ equity $170,000,000 Required

a. Calculate Betsy’s capital structure after issuing $25 million of new debt.

b. Recalculate Betsy’s capital structure after converting half the long-term debt, including that issued in part

a, to common stock.

c. Recalculate Betsy’s capital structure after converting all its preferred stock to common stock.

d. Recalculate Betsy’s capital structure after suffering losses of $10 million in the next fiscal year.