question archive It is January 2nd
It is January 2nd
Subject:Operations ManagementPrice: Bought3
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 2.7. Assume the stock can be issued at yesterday's stock price ($34.21). Which of the following statements are true? Check all that apply.
Select : 3
Submit Answer
- Digby will issue stock totaling $1,710,500
- Total investment for Digby will be $4,618,350
- The Digby bond issue will be $2,907,850
- The Digby Working Capital will be unchanged at $16,676
- Total Assets will rise to $222,833,000
- Long term debt will increase from $81,415,899 to $83,126,399
