Question
It is January 2nd. Senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and
It is January 2nd. Senior management of Chester 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 ($25.91). Which of the following statements are true? Check all that apply.Select: 3
Long term debt will increase from $82,751,818 to $84,047,318
Chester will issue stock totaling $1,295,500
Total investment for Chester will be $3,627,400
Total Assets will rise to $212,533,000
The Chester Working Capital will be unchanged at $11,801
The Chester bond issue will be $2,331,900
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