Ferguson Theatres Inc. operates specialty film format theatres that display images of greater size and higher quality resolution.

Ferguson is considering expanding its theatres in China and needs to raise $$433$ million in additional debt. However, the company is

concerned about remaining compliant with its existing debt to equity ratio covenant of $1\mathrm{.}10$:$1$ and the net debt as a percentage of

capitalization ratio of $50\%.$ For the fiscal year ended December $31,2020,$ an extract of the statement of financial position for Ferguson

Theatres showed the following information: total interest$-$bearing debt of $$837$ million, a cash balance of $$100$ million, and

shareholders' equity of $$1,000$ million.

Determine whether Ferguson Theatres Inc. could borrow $$433$ million and remain in compliance with the bank covenants. $($Round debt

to equity ratio to $2$ decimal places, e$.$g$.1\mathrm{.}25$ and net debt as a percentage of total capitalization to $0$ decimal places, e$.$g$.35\%.)$

Debt to Equity

Net Debt as a Percentage of Total Capitalization

:$1$

$\%$