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 2.8. Assume the stock can be issued at yesterdays stock price ($32.87). Which of the following statements are true? Check all that apply. Select: 3 The Baldwin Working Capital will be unchanged at $8,628 Long term debt will increase from $85,591,219 to $87,234,719 Total investment for Baldwin will be $4,601,800 Total Assets will rise to $225,764,000 Baldwin will issue stock totaling $1,643,500 The Baldwin bond issue will be $2,958,300
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