1. Dora Inc. is raising $2,000,000 in capital for its next project. The firm maintains D/E ratio of 0.7 and it wishes to stay at that number after the capital raising occurs. An investment bank hired to raise capital charges 4% for each amount of debt and 8% for each amount of equity raised. What is the capital structure of this firm?
2. A.50% debt, and 50% equity
3. B.41% debt, and 59% equity
4. C.70% debt, and 30% equity
5. D.75% debt, and 25% equity
6. E. Cannot be determined from the information available