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How much equity does firm need to raise in order to finance

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Curley's Fried Chicken Kitchen operates two southern cooking restaurants in St. Louis, Missouri, and has the following financial structure:

The firm is considering an expansion that would involve raising an additional $2.0 million.

Accounts Payable-$100,000
Short Term Debt-$400,000
Current Liabilities-$500,000
Long-Term Debt-$2,000,000
Owner's Equity-$1,500,000
Total-$4,000,000

Problem a. What are the firm's debt ratio AND interest-bearing debt ratio in its present capital structure? (round to one decimal place)

Problem b. If the firm wants to have a debt ratio of 50%, how much equity does the firm need to raise in order to finance the expansion? (round to two decimal places)

Reference no: EM132836464

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