Sheridan Corporation has accumulated a significant amount of debt as a result of the recent launch of a constellation of satelites. It is currently considering acquiring and launching its largest state-of-the-art observation satellite, SkyEye. Sheridan's existing debt covenants stipulate that it cannot go beyond a debt-to-equity ratio of 1.56:1 and a net debt as a percentage of capitalization ratio of 0.86:1. The acquisition of SkyEye will cost $235 million. Sheridan's current level of equity is $510 million, and its current level of interest-bearing debt is $794.0 million. Sheridan has a cash balance of $80 million. It will finance the acquisition with a 15 -year bond of $225 million that carries a 7% interest rate sold at par. (a) Determine Sheridan's debt to equity ratio and net debt as a percentage of capitalization ratio prior to the proposed acquisition. (Round answers to 2 decimal places, e.g. 1.25:1.) Debt to equity Net debt as a percentage of total capitalization Determine whether Sheridan could acquire SkyEye with the bond issue and remain in compliance with the existing debt covenants. (Round answers to 2 decimal places, eg. 1.25:1.) Debt to equity Net debt as a percentage of total capitalization Sheridan acquire SkyEye