It is January 2nd. Senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (=assets/equity) to a new target of 2.8. Assume the stock can be issued at yesterday’s stock price ($33.52). Which of the following statements are true? Check all that apply.
Select: 3
1. Long term debt will increase from $83,907,118 to $85,583,118
2. Total Assets will rise to $226,187,000
3. The Baldwin bond issue will be $3,016,800
4. Baldwin will issue stock totaling $1,676,000
5. The Baldwin Working Capital will be unchanged at $12,048
6. Total investment for Baldwin will be $4,692,800