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What is the maximum amount that Sveva can borrow

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Question - On December 31, 2015, Sveva Inc. has total liabilities of $652,000 and total equity of $168,000. The company needs to raise additional funds through debt and equity. The company will issue 33,000 shares of common stock at $7 per share and in addition it intends to borrow as much as it can from Bank of Switzerville. Bank of Switzerville requires a maximum debt-to- asset ratio of 0.7. What is the maximum amount that Sveva can borrow after the additional stock is issued?

Reference no: EM132573065

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