Question: If the pro forma balance sheet shows that total assets must increase by $400,000 while retaining a debt-equity ratio of .75 then: A. debt must

If the pro forma balance sheet shows that total assets must increase by $400,000 while retaining a debt-equity ratio of .75 then:

A. debt must increase by $300,000.

B. equity must increase by the full $400,000.

C. debt must increase by $171,429.

D. equity must increase by $100,000.

How is the answer C?

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