It is January 2nd and senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterday’s stock price ($42.57) and leverage changes to 2.7. Which of the following statements are true? Select all that apply. Select: 3 •Total liabilities will be $150,548,149 •Total assets will rise to $238,527,765 •Working capital will remain the same at $16,224,801 •The total investment for Baldwin will be $25,924,850 •Baldwin will issue stock totaling $3,192,750
It is January 2nd and senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterday’s stock price ($42.57) and leverage changes to 2.7. Which of the following statements are true? Select all that apply. Select: 3 •Total liabilities will be $150,548,149 •Total assets will rise to $238,527,765 •Working capital will remain the same at $16,224,801 •The total investment for Baldwin will be $25,924,850 •Baldwin will issue stock totaling $3,192,750
Chapter20: Financing With Derivatives
Section: Chapter Questions
Problem 8P
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Question
It is January 2nd and senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterday’s stock price ($42.57) and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
Select: 3
•Total liabilities will be $150,548,149
•Total assets will rise to $238,527,765
•
•The total investment for Baldwin will be $25,924,850
•Baldwin will issue stock totaling $3,192,750
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