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It is January 2nd. Senior management of ABC Co. meets to determine their investment plan for the year. They decide to fully fund a plant
It is January 2nd. Senior management of ABC Co. 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 2.69. Assume the stock can be issued at yesterday's stock price $15.68. Which of the following statements are true? (Select 2 answers)
- Total investment for ABC Co. will be $2,110,591
- Long term debt will increase from $33,638,191 to $34,422,377
- Total Assets will rise to $145,186,800
- ABC Co. bond issue will be $57,658
- ABC Co. will issue stock totaling $784,186
- ABC Co. working capital will be unchanged at $11,717,882
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