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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 $21.70. Which of the following statements are true? (Select 2 answers) Digby working capital will be unchanged at $15,473,055 Total Assets will rise to $143,145,195 Digby bond issue will be $49,191 Long term debt will increase from $33,913,215 to $34,998,175 Total investment for Digby will be $2,690,469 Digby will issue stock totaling $1,084,960
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