Question
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 ($35.13) and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
The total investment for Digby will be $204,475,977
Equity will be $83,051,554
Digby will issue stock totaling $2,634,750
Working capital will remain the same at $16,357,549
Total Assets will rise to $217,125,372
Total liabilities will be $118,789,673
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