Suppose that you're an investment banker pitching a valuation to a potential acquirer. The target firm has large amounts of accounts receivable and payable.

The acquirer's CFO asks how your valuation would be affected by potential new laws requiring the firm's suppliers to be paid more promptly.

You explain that this will reduce the target firm's accounts payable and is likely to result in an equity valuation that's:

Select one:

a.

Significantly higher.

b.

Largely unchanged.

c.

Significantly lower.

d.

Not enough information.