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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 2.8. Assume the stock can be issued at yesterday's stock price of $23.51. Which of the following statements are true? Check all that apply. a) baldwin will issue stock totaling $1,175,500 b) total investment for baldwin will be $3,291,400 c) the baldwin bond issue will be $2,115,900 d) the baldwin working capital will be unchanged at $9,108 e) total assets will rise to $209,116,000 f) long term debt will increase from $81,159,483 to $82,334,983
a) baldwin will issue stock totaling $1,175,500
b) total investment for baldwin will be $3,291,400
c) the baldwin bond issue will be $2,115,900
d) the baldwin working capital will be unchanged at $9,108
e) total assets will rise to $209,116,000
f) long term debt will increase from $81,159,483 to $82,334,983
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