Under standard accounting rules, it is possible for a companys liabilities to exceed its assets. When this

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Under standard accounting rules, it is possible for a company’s liabilities to exceed its assets. When this occurs, the owners’ equity is negative. Can this happen with market values? Why or why not?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

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Question Posted: Apr 26, 2011 03:29 AM

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Under standard accounting rules, it is possible for a companys liabilities to exceed its assets. When this

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Market values can never be negative Imagine a share of stock selling for 20 This w...View the full answer

Fundamentals of Corporate Finance

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