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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 2.8. Assume the stock can be issued at yesterdays stock price ($28.46). Which of the following statements are true? Check all that apply.Select: 3
Long term debt will increase from $82,158,388 to $83,581,388 | |
Total investment for Digby will be $3,984,400 | |
The Digby bond issue will be $2,561,400 | |
Digby will issue stock totaling $1,423,000 | |
Total Assets will rise to $218,399,000 | |
The Digby Working Capital will be unchanged at $13,175 |
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