P10-1 LO10-1, 10-6 Analyzing the Use of Debt Last year, Arbor Corporation reported the following BALANCE SHEET Total Assets Total Liabilities Total Shareholders' Equity $800,000 500,000 300.000 This year, Arbor is considering whether to issue more debt to fund a $100,000 project or to issue addi tional shares of common stock. Both options will bring in exactly $100,000. Arbor's current debt contracts contain a debt covenant that requires it to maintain a debt-to-equity ratio of 2.0 or less. Required: 1. Calculate Arbor's current debt-to-equity ratio. 2. Calculate Arbor's debt-to-equity ratio assuming it funds the project using additional debt. 3. Calculate Arbor's debt-to-equity ratio assuming it funds the project by issuing common stock. 4. How do you recommend Arbor fund the project