How much equity does need to raise in order to finance

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Green Curry Kitchen operates two restaurants in Hobart and Launceston, Tasmania and has the following financial structure: Account payables $100000, Short term debt $400000, Current liabilities $500000, Long term debt $2000000, Owner's equity $1,500,000 and Total is $4,500,000. The firm is considering an expansion that would involve raising an additional $2 million.

Question (1) What are the firm's debt ratio and debt to equity ratio in it's present capital structure?

Question (2) If the firm wants wants to have a debt ratio of 50% how much equity does it need to raise in order to finance the expansion?

Reference no: EM132519804

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