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• The president of a plastics company was quoted in a business journal as stating, "We haven't had a dollar of interest-paying debt in over 10 years. Not many companies can say that." As a stockholder in this company, how would you feel about its policy of not taking on debt?

• If a stock's market value exceeds its book value, then the stock is overpriced. Do you agree? Explain.

• A company seeking a line of credit at a bank was turned down. Among other things, the bank stated that the company's 2 to 1 current ratio was not adequate. Give reasons why a 2 to 1 current ratio might not be adequate.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91966725

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