Montclair Company is considering a project that will require a $610,000 loan It presently has total liabilities of $165,000 and total assets of $675,000 Compute Montclairs ( a ) current debt to equity ratio and ( b ) the debt to equity ratio assuming it borrows $610,000 to fund the project If Montclair borrows the funds, does its financing structure become more or less risky

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Question: Montclair Company is considering a project that will require a $610,000 loan. It presently has total liabilities of $165,000 and total assets of $675,000. Compute

Montclair Company is considering a project that will require a $610,000 loan. It presently has total liabilities of $165,000 and total assets of $675,000.

Compute Montclairs (a) current debt-to-equity ratio and (b) the debt-to-equity ratio assuming it borrows $610,000 to fund the project.
If Montclair borrows the funds, does its financing structure become more or less risky?

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