It is January 2nd. Senior management of Chester meets to determine their investment plan for the year.
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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 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 2.7. Assume the stock can be issued at yesterday's stock price ($30.78). Which of the following statements are true? Check all that apply. Select: 3
Total Assets will rise to $214,991,000
The Chester Working Capital will be unchanged at $12,576
Chester will issue stock totaling $1,539,000
Long term debt will increase from $81,597,487 to $83,134,487
Total investment for Chester will be $4,155,300
The Chester bond issue will be $2,616,300
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