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What is maximum additional amount that Company ABC borrow

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Reference no: EM132919786

Question - Company ABC has total liabilities of $660,000 and total equity of $342,000. The company needs to raise additional funds through debt and equity. The company will issue 12,000 shares of common stock at $15 per share and in addition it intends to borrow as much as it can from Bank of XYZ. Bank of XYZ requires a maximum debt-to-asset ratio of 0.64. What is the maximum additional amount that Company ABC can borrow after the additional stock is issued?

a. $268,000

b. $164,332

c. The company already reached the maximum and cannot borrow more

d. $96,480

Reference no: EM132919786

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