Solution-Looking at the industry balance sheets

Looking at the industry balance sheets

Reference no: EM131733109

Good day. For this question I get the answer for Andrews as I made use of the Debt Ratio, yet on Coursehero it chooses Chester answer. Please do help explain.

Below is the question (COMP XM):

Looking at the industry Balance Sheets, suppose each company wants to increase its leverage to 3.0 by issuing bonds and purchasing plant and equipment. Which of the following company actions would accomplish that goal?

[ ] Andrews Total Liabilities would rise to 104,329,000. Andrews could buy 39,918,000 additional plant and equipment.

[ ] Digby's Total Liabilities would rise to 190,701,000. Digby could buy 127,134,000 additional plant and equipment.

[ ] Baldwin's Total Liabilities would rise to 91,494,000. Baldwin could buy 45,132,000 additional plant and equipment.

[ ] Chester's Total Liabilities would rise to 120,988,000. Chester could buy 60,494,000 additional plant and equipment.

Reference no: EM131733109

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Looking at the industry balance sheets

Reference no: EM131733109

Reference no: EM131733109

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