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Coney Island enters into a lease agreement for a new ride. The lease payments have a present value of $2.7 million. Prior to this agreement, the company's total assets are $27.1 million and its total liabilities are $15.7 million. Required: 1. Calculate total stockholders' equity prior to the lease agreement. 2. & 3. Calculate the debt to equity ratio, prior to the lease being signed and immediately after the lease being signed. 4. Does the direction of the change in the debt to equity ratio typically indicate that the company has higher leverage risk? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 Calculate total stockholders' equity prior to the lease agreement. (Enter your answer in millions not in dollars (i.e., $5,500,000 should be entered as 5.5). Round your answer to 1 decimal place.) Stockholders' equity million D

Coney Island enters into a lease agreement for a new ride. The lease payments have a present value of $2.7 million. Prior to this agreement, the company's total assets are $27.1 million and its total liabilities are $15.7 million. Required: 1. Calculate total stockholders' equity prior to the lease agreement. 2. & 3. Calculate the debt to equity ratio, prior to the lease being signed and immediately after the lease being signed. 4. Does the direction of the change in the debt to equity ratio typically indicate that the company has higher leverage risk? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 Calculate total stockholders' equity prior to the lease agreement. (Enter your answer in millions not in dollars (i.e., $5,500,000 should be entered as 5.5). Round your answer to 1 decimal place.) Stockholders' equity million D

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Coney Island enters into a lease agreement for a new ride. The lease payments have a present value of $2.7 million. Prior to this agreement, the company's total assets are $27.1 million and its total liabilities are $15.7 million. Required: 1. Calculate total stockholders' equity prior to the lease agreement. 2. & 3. Calculate the debt to equity ratio, prior to the lease being signed and immediately after the lease being signed. 4. Does the direction of the change in the debt to equity ratio typically indicate that the company has higher leverage risk? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 Calculate total stockholders' equity prior to the lease agreement. (Enter your answer in millions not in dollars (i.e., $5,500,000 should be entered as 5.5). Round your answer to 1 decimal place.) Stockholders' equity million <Req 1 Req 2 and 3> D
Transcribed Image Text:Coney Island enters into a lease agreement for a new ride. The lease payments have a present value of $2.7 million. Prior to this agreement, the company's total assets are $27.1 million and its total liabilities are $15.7 million. Required: 1. Calculate total stockholders' equity prior to the lease agreement. 2. & 3. Calculate the debt to equity ratio, prior to the lease being signed and immediately after the lease being signed. 4. Does the direction of the change in the debt to equity ratio typically indicate that the company has higher leverage risk? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 Calculate total stockholders' equity prior to the lease agreement. (Enter your answer in millions not in dollars (i.e., $5,500,000 should be entered as 5.5). Round your answer to 1 decimal place.) Stockholders' equity million <Req 1 Req 2 and 3> D
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