8 of 15 < > View Policies Show Attempt History Current Attempt in Progress 0/1 III Fessenden Corporation has accumulated a significant amount of debt as a result of debt-financed acquisitions of other companies. It is currently considering acquiring one of its competitors, Sonar Corporation. Fessenden's existing debt covenants stipulate that it cannot go beyond a debt to equity ratio of 1.25:1 and a net debt as a percentage of capitalization ratio of 0.90:1. The acquisition of Sonar will cost $80 million. Fessenden's current level of equity is $490 million and its current level of interest-bearing debt is $665 million. Fessenden has a cash balance of $77 million. It will finance the acquisition with a 10-year bond of $80 million that carries a 5% interest rate sold at par. (a) Your answer is incorrect. Determine Fessenden's debt to equity ratio and net debt as a percentage of capitalization ratio prior to the proposed acquisition. (Round answers to 2 decimal places, e.g. 1.25.) Debt to Equity Net Debt as a Percentage of Total Capitalization :1 :1 eTextbook and Media Save for Later Last saved 10 hours ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. Attempts: unlimited Submit