Calculate the amount of debt that the management

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The return on assets for Super Express Ltd is 13.5% pa. Currently the capital structure for Super Express Ltd is 100% equity but management are considering issuing debt. Super Express Ltd has 31,200 shares on offer at a current price of $8.92 per share.

Management wishes to issue enough debt capital to repurchase 29% of existing shares at the current share price.

a) Calculate the amount of debt that the management of Super Express will be issuing. Give your answer in dollars to the nearest dollar.
Debt issued = $

b) Calculate the debt to equity (leverage) ratio of Super Express Ltd after the debt issue. Give your answer rounded to 2 decimal places.
Debt to equity ratio =

Reference no: EM133072614

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