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 2.51. Assume the stock can be issued at yesterday's stock price $23.27. Which of the following statements are true? (Select 2 answers) Digby will issue stock totaling $1,163,312 Total Assets will rise to $148,127,342 Digby working capital will be unchanged at $16,477,503 Total investment for Digby will be $2,922,424 Long term debt will increase from $33,756,662 to $34,919,974 Digby bond issue will be $50,486
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