Super Slides has $20 million in bonds payable. As part of the contractual agreement with bondholders, the company guarantees to keep its debt to equity ratio below 2.0. Super Slides' total assets are $90 million and its liabilities, other than the bonds payable, are $40 million. The company needs additional assets and is considering purchasing these assets by issuing a note payable or by leasing. Required:

1. Calculate total stockholders' equity using the balance sheet equation.

2. What is the debt to equity ratio?

4-a. If the company can obtain the asset by issuing a $2 million note payable, Will issuing the note payable affect the debt to equity ratio?

4-b. If the company can obtain the asset by signing a lease agreement requiring payments with a present value of $2 million, Will the lease agreement affect the debt to equity ratio?

5-a. Calculate the debt to equity ratio assuming they issue a note payable.

5-b. Will issuing the note payable cause the debt to equity ratio to be in violation of the contractual agreement with bondholders?

5-c. Calculate the debt to equity ratio assuming they sign a lease.

5-d. Will signing a lease cause the debt to equity ratio to be in violation of the contractual agreement with bondholders?