When the projected liabilities and equity are greater than the assets, the firm can plan to
A)pay dividends.
B)retire debt.
C)retain extra cash.
D)all of the above

Question

Quizplus · Accepted Answer

When projected liabilities and equity are greater than assets, it indicates that the firm may not have enough assets to cover its obligations and equity claims. In such a scenario, paying dividends, retiring debt, or retaining extra cash are all strategies that can help manage the firm's financial structure and obligations. Paying dividends can return value to shareholders, retiring debt can reduce liabilities, and retaining extra cash can provide a buffer for future financial needs or obligations.

When the Projected Liabilities and Equity Are Greater Than the Assets