Assume that ABC Company raised $4 million with an equity issuance and used the pro ceeds to
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Assume that ABC Company raised $4 million with an equity issuance and used the pro¬ ceeds to acquire additional property, plant, and equipment. Provide a plausible explana¬ tion for how these transactions would affect ABC’s earning power, financial flexibility, and liquidity. How would ABC’s earning power, financial flexibility, and liquidity be affected if the company used the proceeds to reduce outstanding debts?
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