Adjusting a firm's capital structure)Curley's Fried Chicken Kitchen operates two southern cooking restaurants in St. Louis, Missouri, and has the following financial structure: . The firm is considering an expansion that would involve raising an additional

$2.4 million.

Accounts payable	$102,000
Short-term debt	407,000
Current liabilities	$509,000
Long-term debt	2,174,000
Owner's equity	1,505,000
Total	$4,188,000

A.What are the firm's debt ratio and interest-bearing debt ratio in its present capital structure?

b.If the firm wants to have a debt ratio of 50 percent, how much equity does the firm need to raise in order to finance the expansion?

ANSWERS:

A) The firm's debt ratio is _______64.06%. (Round to one decimal place.)

The firm's interest-bearing debt ratio is ________61.63%. (Round to one decimal place.)

B). If the firm wants to have a debt ratio of 50%, the equity the firm needs to raise is $_________-?. (Round to the nearest dollar.)

Please answer the blank above