Percentage fall in assets be before all equity is wiped out

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Reference no: EM13972228

Massachusetts Burger is a national chain that, because of its success, has decided to expand. MassBurger, as it’s also known, is currently unlevered and has assets valued at 2000000. Suppose the size of the assets increases by a factor of 3.15 (for example, if the factor is 10, then it means the amount of assets will be 10 times as large), with all of the expansion funds coming from debt capital.

What must the percentage fall in the assets be before all the equity is wiped out?

Reference no: EM13972228

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