Question
It is January 2nd. Senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and
It is January 2nd. Senior management of Digby 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 2.46. Assume the stock can be issued at yesterday's stock price $20.05. Which of the following statements are true? (Select 2 answers) Digby will issue stock totaling $1,002,472 Total Assets will rise to $141,556,851 Total investment for Digby will be $2,466,975 Digby bond issue will be $48,436 Long term debt will increase from $34,015,412 to $35,017,884 Digby working capital will be unchanged at $15,455,530
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