Derra Foods is a specialty food retailer. In its balance sheet

Derra Foods is a specialty food retailer. In its balance sheet, the firm reports $1 billion in book value of equity and no debt, but it has operating leases on all its stores. In the most recentyear,the firmmade$85 millioninoperating leasepaymentsand its commitments to make lease payments for the next 5 years and beyond are summarized.YearOperating Lease Expense1$ 90 million2$ 90 million3$ 85 million4$ 80 million5$ 80 million6-10$ 75 million annuallyIf the firm’s current cost of borrowing is 7%, estimate the debt value of operating leases. Estimate the book value debt to equity ratio.