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 2.49. Assume the stock can be issued at yesterday's stock price $20.51. Which of the following statements are true? (Select 2 answers)
Digby will issue stock totaling $1,025,514
Total investment for Digby will be $2,552,318
Total Assets will rise to $150,358,763
Long term debt will increase from $34,672,367 to $35,697,881
Digby working capital will be unchanged at $18,980,562
Digby bond issue will be $49,553
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