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It is January 2 nd. Senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant
It is January 2 nd. Senior management of Digby 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 2.49. Assume the stock can be issued at yesterday's stock price $22.55. Which of the following statements are true? (Select 2 answers) Long term debt will increase from $33,651,183 to $34,778,677 Total Assets will rise to $145,769,452 Digby working capital will be unchanged at $16,009,054 Total investment for Digby will be $2,806,338 Digby bond issue will be $49,560 Digby will issue stock totaling $1,127,494
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