The statement of financial position as of December $31,2024,$ for Pharoah Corporation follows:

$($all amounts in thousands$)$

The company's management is evaluating a couple of options to finance the acquisition of new equipment with a cost of $$38$ million.

$($a$)$

Pharoah has a cash balance of $$20$ million as of December $31,2024.$ Determine the debt to equity ratio and net debt as a

percentage of total capitalization ratio. Assume that only the company's long$-$term liabilities are interest bearing. $($Round answers

to $2$ decimal places, e$.$g$.1\mathrm{.}25$:$1.)$

Debt to equity

Net debt as a percentage of total capitalization

$0\mathrm{.}23$

:$1$

$($b$)$

Your answer is incorrect.

Pharoah is considering borrowing $$38$ million by taking out a six$-$year bank loan that carries $10\%$ interest payable semi$-$annually.

Determine the company's debt to equity and debt as a percentage of total capitalization ratios if it decides to borrow the money

and purchase the equipment. $($Round answers to $2$ decimal places, e$.$g$.1\mathrm{.}25$:$1.)$

Debt to equity

Net debt as a percentage of total capitalization

:$1$