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Compute montclair current debt-to-equity ratio

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Question - Montclair Company is considering a project that will require a $500,000 loan. It presently has total liabilities of $220,000 and total assets of $620,000.

1. Compute Montclair's (a) current debt-to-equity ratio and (b) the debt-to-equity ratio assuming it borrows $500,000 to fund the project.

2. If Montclair borrows the funds, does its financing structure become more or less risky?

Reference no: EM133061186

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