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Loze Inc. is a company that has $800 million in debt outstanding and a market capitalization of $200 million. The company is having trouble making
Loze Inc. is a company that has $800 million in debt outstanding and a market capitalization of $200 million. The company is having trouble making its interest payments and is considering selling a division (with an estimated value of $400 million) and using the proceeds from the sale to retire debt. Assuming that it can sell the division for fair value, what will the debt ratio as a percentage of capital (equity and debt) be for Loze after this transaction?
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