It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply. The total investment for Chester will be $205,250,150 Total liabilities will be $134,271,217 Chester’s long-term debt will rise by $9,000,000 Working capital will remain the same at $15,305,774 Total Assets will rise to $218,643,119
It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply. The total investment for Chester will be $205,250,150 Total liabilities will be $134,271,217 Chester’s long-term debt will rise by $9,000,000 Working capital will remain the same at $15,305,774 Total Assets will rise to $218,643,119
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
-
The total investment for Chester will be $205,250,150
-
Total liabilities will be $134,271,217
-
Chester’s long-term debt will rise by $9,000,000
-
Working capital will remain the same at $15,305,774
-
Total Assets will rise to $218,643,119
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