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From my industry research on Chester, I've learned that senior management intends to fully fund a new technology purchase by issuing 75,000 shares of stock
From my industry research on Chester, I've learned that senior management intends to fully fund a new technology purchase by issuing 75,000 shares of stock as well as a new bond issue at the beginning of next year. My forecast indicates that this will increase Chester's leverage (assets/equity) to 2.14. I'm now examining the effects that this investment plan will have on Chester. If we assume that the stock is issued at yesterday's stock price of $38.40, which of the following conclusions are correct? I'd estimate that a third of these are right. Ronald Ronald Jefferson Board Member, Accounting & Finance | Andrews Corporation Choose all responses that apply. O Long term debt will increase from $48,250,000 to $51, 130,000 Total Assets will rise to $172,310,660. Total investment for Chester will be $6, 163,200. ) Chester will issue stock totaling $2,880,000. ) The Chester bond issue will be $3,283,200. O The Chester Working Capital will be unchanged at $22,667,000
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