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 2.48. Assume the stock can be issued at yesterday's stock price $20.86. Which of the following statements are true? (Select 2 answers)
Total Assets will rise to $145,811,545
Digby working capital will be unchanged at $17,716,293
Long term debt will increase from $35,055,026 to $36,097,895
Digby will issue stock totaling $1,042,869
Total investment for Digby will be $2,586,793
Digby bond issue will be $49,218
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