The Liquidation Value of a Firm Is Equal to the Book

question 69

True/False

The liquidation value of a firm is equal to the book value of the firm.

---

Definitions:

Market Value

The price at which an asset would trade in a competitive auction setting.

Common Stock

A type of equity security that represents ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.

Retained Earnings

The portion of a business's profits not distributed to shareholders but reinvested in the business or held for future use.

Surplus Cash

Excess funds that a company retains over its necessary working capital and capital expenditure requirements, often available for investment or distribution.