Question
Chunky Cheese Pizza has $60.2 million in bonds payable. The bond indenture states that the debt to equity ratio cannot exceed 3.04. Chunkys total assets
Chunky Cheese Pizza has $60.2 million in bonds payable. The bond indenture states that the debt to equity ratio cannot exceed 3.04. Chunkys total assets are $200.2 million, and its liabilities other than the bonds payable are $90.2 million. The company is considering some additional financing through leasing. 4-a. Will entering into the lease cause the debt to equity ratio to be in violation of the contractual agreement in the bond agreement? Yes No 4-b. Calculate the debt to equity ratio. (Enter your answer in millions. (i.e., $5,500,000 should be entered as 5.5). Round ratio answer to 2 decimal places.)
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