What is the minimum amount that shareholders should expect to receive in the event of a complete corporate liquidation?
A)market value of equity
B)book value of equity
C)zero
D)shareholders may be required to pay to be liquidated

Question

Quizplus · Accepted Answer

In the event of a complete corporate liquidation, there is no guarantee that there will be any money left over for shareholders after creditors and other obligations are paid off. Therefore, shareholders may receive zero in a liquidation scenario. The market value of equity (A) and book value of equity (B) are both measures of a company's worth that are influenced by numerous factors and are not reliable indicators of how much shareholders would receive in a liquidation scenario. Shareholders being required to pay to be liquidated (D) is not a common occurrence and is not applicable in this context.

What Is the Minimum Amount That Shareholders Should Expect to Receive