Compute montvale''s debt/equity ratio immediately after loan

Reference no: EM131411117

1 during the period of the loan. A summary of Montvale's balance sheet after the loan follows.

a. Compute Montvale's debt/equity ratio immediately after the loan.

b. How much additional debt can the company incur without violating the debt covenant?

c. How large a dividend can the company declare and pay at the end of 2011 without violating the debt covenant?

d. If Montvale had declared, but not yet paid, a $20,000 dividend before it took out the loan, could the company pay the dividend afterward without violating the debt covenant? Why or why not?

Reference no: EM131411117

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