Firm a and Firm B Are Identical Except That a Is

question 26

Multiple Choice

Firm A and Firm B are identical except that A is incorporated while B is an unlimited liability partnership.Both have assets worth $500,000 ($500K) funded with a debt ratio of 40%.Suppose that the assets suddenly become worthless,what is the maximum possible loss to the equityholders of each company?

• A)Firm A: $300K; Firm B: $500K
• B)Firm A: $200K; Firm B: $300K
• C)Firm A: $500K; Firm B: $200K
• D)Firm A: $500K; Firm B: $500K

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Definitions:

Educational Attainment

The highest level of education an individual has completed, ranging from primary schooling to tertiary education degrees.

Black Students

Refers to students of African descent, focusing on their demographics, educational achievements, and challenges faced within educational systems.

Low-Level Academic

Refers to basic or foundational academic courses or studies that do not require specialized knowledge or skills.

Educational Attainment

The highest level of education an individual has completed, often used as a measure of socio-economic status.