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need answer with why The following table shows the balance sheet for Poor Baby Bank. Balance Sheet for Poor Baby Bank Assets Reserves $18 Long-term
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The following table shows the balance sheet for Poor Baby Bank. Balance Sheet for Poor Baby Bank Assets Reserves $18 Long-term investments $135 $90 $45 Liabilities and stockholders' equity Demand deposits Borrowing from other banks Total liabilities Stockholders' equity Total liabilities + stockholders' equity Total assets 8. Refer to the table above. What happens to stockholders' equity if there is an economic downturn and as a result, Poor Baby Bank loses 5 percent of its long-term investments and has to borrow another $10 from other banks? A) It decreases to $0 and the bank becomes insolvent B) It decreases to $1.25 C) It decreases to $8 D) It decreases to $11.25 The following table shows the balance sheet for Poor Baby Bank. Balance Sheet for Poor Baby Bank Assets Reserves $18 Long-term investments $135 $90 $45 Liabilities and stockholders' equity Demand deposits Borrowing from other banks Total liabilities Stockholders' equity Total liabilities + stockholders' equity Total assets 8. Refer to the table above. What happens to stockholders' equity if there is an economic downturn and as a result, Poor Baby Bank loses 5 percent of its long-term investments and has to borrow another $10 from other banks? A) It decreases to $0 and the bank becomes insolvent B) It decreases to $1.25 C) It decreases to $8 D) It decreases to $11.25 Step by Step Solution
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