Q$5$:

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\mathrm{.}0$ 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?