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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 $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true?

PLEASE SELECT THREE TRUE STATEMENTS:

  • The total investment for Digby will be $11,666,447

  • Total liabilities will be $130,472,703

  • Digbys long-term debt will rise by $10,000,000

  • Working capital will remain the same at $12,409,410

  • Total Assets will rise to $208,201,553

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