Fessenden Corporation has accumulated a significant amount of debt as a result of debt-financed acquisitions of other companies. It is currently considering acquiring one of its competitors, Sonar Corporation. Fessenden's existing debt covenants stipulate that it cannot go beyond a debt to equity ratio of 1.25:1 and a net debt as a percentage of capitalization ratio of 0.90:1. The acquisition of Sonar will cost $72 million. Fessenden's current level of equity is $410 million and its current level of interest-bearing debt is $562 million. Fessenden has a cash balance of $70 million. It will finance the acquisition with a 10-year bond of $72 million that carries a 5% interest rate sold at par. Determine whether Fessenden could acquire Sonar Corporation with the bond issue and still remain in compliance with the existing debt covenants. (Round answers to 2 decimal places, e.g. 1.25.) Debt to Equity 1.55 :1 Net Debt as a Percentage of Total Capitalization 0.58 :1 Fessenden cannot acquire Sonar Corporation