Exercise $10-16$ Applying debt$-$to$-$equity ratio A$2$

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.$

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.

If Montclair borrows the funds, does its financing structure become more or less risky?