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 2.48. Assume the stock can be issued at yesterday's stock price $23.14. Which of the following statements are true? (Select 2 answers)
Digby working capital will be unchanged at $19,327,325
Long term debt will increase from $34,106,064 to $35,263,186
Digby will issue stock totaling $1,157,122
Total investment for Digby will be $2,869,900
Digby bond issue will be $49,208
Total Assets will rise to $152,429,338
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