11 Exercise 10-16 (Static) Applying debt-to-equity ratio LO A2 0.5 points Montclair Company is considering...
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11 Exercise 10-16 (Static) Applying debt-to-equity ratio LO A2 0.5 points 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? Answer is not complete. Choose Numerator: Choose Denominator : Debt-to-Equity Ratio Total liabilities $ 220,000 0 1 (a) 1 (b) 2 0 If Montclair borrows the funds, does its financing structure become more or less risky? More
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