Question
It is January 2nd. Senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and
It is January 2nd. Senior management of Baldwin 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 2.50. Assume the stock can be issued at yesterday's stock price $21.22. Which of the following statements are true? (Select 2 answers)
Long term debt will increase from $34,248,996 to $35,309,749
Baldwin will issue stock totaling $1,060,753
Baldwin bond issue will be $50,090
Total Assets will rise to $146,318,945
Total investment for Baldwin will be $2,654,270
Baldwin working capital will be unchanged at $16,583,185
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