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It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant

It is January 2nd and 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 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterdays stock price ($37.48) and leverage changes to 2.7. Which of the following statements are true? Select all that apply.

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  • The total investment for Digby will be $24,710,632

  • Total liabilities will be $143,626,664

  • Digby will issue stock totaling $2,811,000

  • Total assets will rise to $227,541,269

  • Working capital will remain the same at $15,581,435

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