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The Liquidity of the Assets of the Divested Company Does

question 1

True/False

The liquidity of the assets of the divested company does not play a role in the amount of value created.


Definitions:

Balance Sheet

An accounting report detailing a business's assets, debts, and owner's equity on a certain date.

Equity and Debt

The two main types of financing for companies: equity represents ownership (stocks), and debt represents borrowed funds (bonds or loans) that must be repaid.

Tax Deductible

Costs that can be deducted from total income to lower the taxable income amount.

Return to Equity

The amount of net income returned as a percentage of shareholders equity.

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