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 2.47. Assume the stock can be issued at yesterday's stock price $20.29. Which of the following statements are true? (Select 2 answers)
Digby bond issue will be $48,984
Long term debt will increase from $33,516,072 to $34,530,379
Digby working capital will be unchanged at $14,758,200
Digby will issue stock totaling $1,014,307
Total Assets will rise to $141,884,864
Total investment for Digby will be $2,510,005
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