Chunky Cheese Pizza has $60 million in bonds payable. The bond agreement states that the debt to equity ratio cannot exceed 3.02. Chunkys total assets are $200 million, and its liabilities other than the bonds payable are $90 million. The company is considering some additional financing through leasing.

The company enters a lease agreement requiring lease payments with a present value of $5.0 million.

4-a. Will entering into the lease cause the debt to equity ratio to be in violation of the bond agreement? 4-b. Determine your answer by calculating the debt to equity ratio after recording the lease.