1. Dearborn Supplies has total sales of $194 million, assets over $101 million, a return on equity of 26%, and a net profit margin of 7.2%. What is the firm's debt ratio?
The company's debt ratio is______%.
2. An investor considers the purchase of a 2-year bond with a 5% coupon rate, with interest paid annually. Assuming the sequence of spot rates shown below, what is the price of the bond?
Time-to-Maturity Spot Rates
1 year 3%
2 years 4%
Please Show Work and Explain.