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 2.45. Assume the stock can be issued at yesterday’s stock price $12.77. Which of the following statements are true? (Select 2 answers)
Digby bond issue will be $47,876
Total investment for Digby will be $1,561,854
Digby will issue stock totaling $638,297
Long term debt will increase from $34,253,638 to $34,891,935
Total Assets will rise to $131,267,730
Digby working capital will be unchanged at $12,181,751
Jos Simulation Answered question April 6, 2025
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