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 2.52. Assume the stock can be issued at yesterday's stock price $18.38.
Which of the following statements are true? (Select 2 answers)
A. Long term debt will increase from $34,179,810 to $35,098,927
B. Total Assets will rise to $144,523,927
C. Digby working capital will be unchanged at $15,429,477
D. Total investment for Digby will be $2,320,302
E. Digby will issue stock totaling $919,117
F. Digby bond issue will be $50,980
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Statistics Informed Decisions Using Data
Authors: Michael Sullivan III
5th Edition
978-0134135373, 134133536, 134135377, 978-0134133539
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