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Barr Co. has total debt of $420,000 and equity of $700,000. Barr is seeking capital...

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Accounting

Barr Co. has total debt of $420,000 and equity of $700,000. Barr is seeking capital to fund an expansion. Barr is planning to issue an additional $300,000 in common stock and is negotiating with a bank to borrow additional funds. The bank requires a debt-to-equity ratio of .75. What is the maximum additional amount Barr will be able to borrow? Select one:

a. $225,000

b. $330,000

c. $525,000

d. $750,000

I chose c, which was incorrect. Can you please show me how to get to the correct answer? Thank you

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