1. 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 ($35.35) and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
Select: 3
Baldwin will issue stock totaling $2,651,250
Total Assets will rise to $217,296,687
The total investment for Baldwin will be $206,463,249
Equity will be $83,131,504
Working capital will remain the same at $15,749,496
Total liabilities will be $120,680,495
2. Baldwin's turnover rate for this year is 6.30%. This rate is projected to remain the same next year and no further downsizing will occur from automating. Baldwin plans to spend an additional $500 beyond the extra amount above the $1000 recruiting base it spent this year. The goal of this additional investment is to improve the quality of applicants. What would the total recruiting cost be for Baldwin next year?
$189,882
$205,705
$174,058
$158,235