Answer:
$330,000
Explanation:
The debt-equity ratio is the ratio hat shows the rel,relationship between debt and equity. It a a measure of financial risk.
Debt-equity ratio = Debt/Equity
Debt-equity ratio= 0.75
Maximum additional debt that Barr will be able t borrow =
Target debt - existing amount of debt
Total target equity for Barr =( 700000+ 300000)= 1,000,000
0.75 = target debt/1,000,000
Target debt = 0.75× 1,000,000
= 750,000
Maximum debt additional debt that Barr will be able t borrow =
Target debt - existing amount of debt
= 750,000 - 420,000
= $330,000
