Coney Island enters into a lease agreement for a new ride. The lease payments have a present value of $$2$ million. Prior to this agreement, the company$$s total assets are $$25$ million and its total liabilities are $$15$ million.

Required:

$1.$ Calculate total stockholders$$ equity prior to the lease agreement.

$2.$ & $3.$ Calculate the debt to equity ratio, prior to the lease being signed and immediately after the lease being signed.

$4.$ Does the direction of the change in the debt to equity ratio typically indicate that the company has higher leverage risk?