A firm's liquidation value is the amount:
A)Necessary to repurchase all shares of common stock
B)Realized from selling all assets and repaying debts
C)A purchaser would pay for the firm in bankruptcy
D)Equal to the book value of equity

Question

Quizplus · Accepted Answer

Liquidation value refers to the amount that would be realized from selling all assets and using the proceeds to repay all of the firm's debts. This amount would then be distributed to the shareholders, if any funds remain. Therefore, the correct answer is B.

A Firm's Liquidation Value Is the Amount