Current Liabilities. Suppose that at year-end Pepsi had unused lines of credit which would have allowed it

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Current Liabilities. Suppose that at year-end Pepsi had unused lines of credit which would have allowed it to borrow a further $300 million. Suppose also that it used this line of credit to borrow $300 million and invested the proceeds in marketable securities. Would the company have appeared to be

(a) more or less liquid,

(b) more or less highly leveraged? Calculate the appropriate ratios.

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Study Guide To Accompany Fundamentals Of Corporate Finance

ISBN: 9780073012421

5th Edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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