Last year, Arbor Corporation reported the following: Balance Sheet Total Assets $ 800,000...
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Accounting
Last year, Arbor Corporation reported the following:
Balance Sheet
Total Assets $
Total Liabilities
Total Shareholders' Equity $
This year, Arbor is considering whether to issue more debt to fund a $ project or to issue additional shares of common stock. Both options will bring in exactly $ Arbor's current debt contracts contain a debt covenant that requires it to maintain a debttoequity ratio of or less.
Required:
Calculate Arbor's current debttoequity ratio.
Calculate Arbor's debttoequity ratio assuming it funds the project using additional debt.
Calculate Arbor's debttoequity ratio assuming it funds the project by issuing common stock.
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