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A) Cord Company has a Debt to Equity ratio of 1/4. Management has made a decision to recapitalize (capital restructuring). They want to increase debt

A) Cord Company has a Debt to Equity ratio of 1/4. Management has made a decision to recapitalize (capital restructuring). They want to increase debt by 5% (as a portion of the total capital structure) and repurchase outstanding shares with the proceeds. What will their new Debt to Equity be?

a)

26.25%

b)

26.58%

c)

33.33%

d)

20.00%

B) Who gets paid first in a bankruptcy process?

a)

The employees

b)

The management

c)

The government

d)

The court

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