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 2.44. Assume the stock can be issued at yesterday's stock price $19.63. Which of the following statements are true? (Select 2 answers) Total investment for Digby will be $2,397,115 Long term debt will increase from $33,206,842 to $34,188,347 Digby bond issue will be $47,691 Digby working capital will be unchanged at $16,198,106 Digby will issue stock totaling $981,505 Total Assets will rise to $144,223,731
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started