PROBLEM:

Curley's Fried Chicken Kitchen operates two southern cooking restaurants in St. Louis, Missouri, and has the following financial structure: The firm is considering an expansion that would involve raising an additional $2.6 million.

a.What are the firm's debt ratio and interest-bearing debt ratio in its present capital structure?

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?

------------------------------------

QUESTIONS:

a.The firm's debt ratio is (?)%. (Round to one decimal place.)

The firm's interest-bearing debt ratio is (?)%. (Round to one decimal place.)

b.If the firm wants to have a debt ratio of 50%, the equity the firm needs to raise is $(?). (Round to the nearest dollar.)

dollar.) Data Table Accounts payable Short-term debt Current liabilities Long-term debt Owner's equity Total $116,000 398,000 $514,000 2,078,000 1,543,000 $4,135,000 Print Done