Book and liquidation value The balance sheet for Macadamia Industries is as follows. Additional information with respect

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Book and liquidation value The balance sheet for Macadamia Industries is as follows.

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Additional information with respect to the firm is available:
(1) Accounts receivable and inventories can be liquidated at 95% of book value.
(2) The firm has 10,000 shares of common stock outstanding.
(3) Preferred stock can be liquidated at book value.
(4) All interest and dividends are currently paid up.
(5) Land and buildings can be liquidated at 150% of book value.
(6) Machinery and equipment can be liquidated at 80% of book value.
(7) Cash and marketable securities can be liquidated at the book value.
Using the information provided, answer the following:

a. What is Macadamia Industries’ book value per share?

b. What is its liquidation value per share?

c. Compare, contrast, and discuss the values found in parts a and b.

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Related Book For  book-img-for-question

Principles Of Managerial Finance

ISBN: 9781292400648

16th Global Edition

Authors: Chad Zutter, Scott Smart

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