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i) Tuah Restaurant operates two branches in Klang Valley, and has the following financial structure: RM Accounts payable Short term debt Current liabilities Long-term debt

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i) Tuah Restaurant operates two branches in Klang Valley, and has the following financial structure: RM Accounts payable Short term debt Current liabilities Long-term debt Owner's equity Total 100,000 400,000 500,000 2,000,000 1,500,000 4,000,000 The restaurant is considering an expansion that would involve raising an additional RM2 million. Required: a) What are the firm's debt ratio and interest-bearing debt ratio for its present capital structure? (3 Marks) b) If the firm wants to have a debt ratio of 50 percent, how much equity does the firm need to raise in order to finance the expansion

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