What percentage of assets would be financed by equity round

Reference no: EM13602537

Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2012, for Business Solutions follow.

Total assets $121,168 Total liabilities $866 Total equity $120,302

Required:
1.The bank has offered a long-term secured note to Business Solutions. The bank's loan procedures require that a client's debt-to-equity ratio not exceed 0.89. As of March 31, 2012, what is the maximum amount that Business Solutions could borrow from this bank? (Round your intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Maximum amount $

2. If Business Solutions borrows the maximum amount allowed from the bank.

(a)What percentage of assets would be financed by debt? (Round your intermediate dollar values to the nearest whole number and final answer to 1 decimal place. Omit the "%" sign in your response.)

Percentage of Assets financed by Debt %

(b)What percentage of assets would be financed by equity? (Round your intermediate dollar values to the nearest whole number and final answer to 1 decimal place. Omit the "%" sign in your response.)

Reference no: EM13602537

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