If a company uses $100 million of its cash to pay off debt,its stockholders' equity will increase $100 million.

Name: If a company uses $100 million of its cash to pay off debt,its stockholders' equity will increase $100 million.
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Question

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If a company uses $100 million of its cash to pay off debt, it will reduce its liabilities by $100 million, but it will not increase the stockholders' equity. The equity remains the same unless there are other factors affecting it, such as profits or losses.

If a Company Uses $100 Million of Its Cash to Pay