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 2.56. Assume the stock can be issued at yesterday's stock price $17.76. Which of the following statements are true? (Select 2 answers) Long term debt will increase from $34,297,887 to $35,186,120 Digby working capital will be unchanged at $13,428,000 Digby will issue stock totaling $888,233 Total investment for Digby will be $2,269,682 Digby bond issue will be $52,211 Total Assets will rise to $140,791,672
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started