3) You have been asked to calculate the debt ratio for a firm that has the following components to its financing mix

The firm has 1 million shares outstanding, trading at $ 50 per share.

The firm has $ 25 million in straight debt, carrying a market interest rate of 8%.

The firm has 20,000 convertible bonds outstanding, with a face value of $1000, a market value of $1100, and a coupon rate of 5%. Estimate the debt ratio for this firm.