Corporate Finance
12th Edition
ISBN: 9781259918940
Author: Ross, Stephen A.
Publisher: Mcgraw-hill Education,
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Question
Chapter 2, Problem 1CQ
Summary Introduction
Given statement: Whether all the assets are liquid at some price
Liquidity:
The liquidity of an asset refers to its ease and quickness in converting itself into cash without any significant loss in value. Cash in hand, cash at bank, short-term investments, accounts receivable, and inventories are some of the examples of liquid assets displayed in the decreasing order of liquidity.
Expert Solution & Answer
Answer to Problem 1CQ
Correct answer: True
Explanation of Solution
Any assets which are easily convertible into cash are termed as liquid assets. Irrespective of this, every assets can be converted into cash or market value during a course of time.
Hence, the given statement is true.
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Chapter 2 Solutions
Corporate Finance
Ch. 2 - Prob. 1CQCh. 2 - Prob. 2CQCh. 2 - Prob. 3CQCh. 2 - Prob. 4CQCh. 2 - Prob. 5CQCh. 2 - Cash Flow from Assets Why is it not necessarily...Ch. 2 - Operating Cash flow Why is it not necessarily bad...Ch. 2 - Net Working Capital and Capital Spending Could a...Ch. 2 - Cash Flow to Stockholders and Creditors Could a...Ch. 2 - Prob. 10CQ
Ch. 2 - Building a Balance Sheet Alesha, Inc., has current...Ch. 2 - Building an Income Statement Gia, Inc, has sales...Ch. 2 - Market Values and Book Values Klingon Cruisers,...Ch. 2 - Calculating Taxes Terri Simmons is single and had...Ch. 2 - Calculating OCF Sheaves, Inc., has sales of...Ch. 2 - Prob. 6QAPCh. 2 - Prob. 7QAPCh. 2 - Prob. 8QAPCh. 2 - Prob. 9QAPCh. 2 - Prob. 10QAPCh. 2 - Cash Flows Ritter Corporations accountants...Ch. 2 - Financial Cash Flows The Stancil Corporation...Ch. 2 - Building an Income Statement During the year, the...Ch. 2 - Prob. 14QAPCh. 2 - Prob. 15QAPCh. 2 - Residual Claims Stark: Inc., is obligated to pay...Ch. 2 - Net Income and OCF During 2019, Rainbow Umbrella...Ch. 2 - Prob. 18QAPCh. 2 - Prob. 19QAPCh. 2 - Prob. 20QAPCh. 2 - Prob. 21QAPCh. 2 - Prob. 22QAPCh. 2 - Cash Flows You are researching Time Manufacturing...Ch. 2 - Prob. 24QAPCh. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MC
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Similar questions
- List TWO (2) factors that contribute to it LIQUIDITYarrow_forwardGive typing answer with explanation and conclusion What is liquidity a measure of? Discuss the potential merits of high liquidity versus low liquidity.arrow_forwardQuestion No. 2: Write short notes on the following: A. Market Segmentation Theory. B. Liquidity Premium Theory.arrow_forward
- Some banks use regression methods to estimate liquidity needs Select one: O True O False US PAGEarrow_forward3. Describe the Discounted Cash Flow Method. How is this value determined, and what are the assumptions/limitations?arrow_forwardWhat is liquidity risk? Define briefly with an appropriate examplearrow_forward
- Isn't the maturity value/principal is what we are looking for? F = Pr/(1-DT)?arrow_forwardWhich of the following statements is correct? Select one: O A. Expectations theory combines segmented markets theory and liquidity premium theory. О в. Segmented markets theory combines expectations theory and liquidity premium theory. C. Liquidity premium theory combines expectations theory and segmented markets theory. O D. Expectations theory combines liquidity premium theory and preferred habitat theory.arrow_forwardWhat L/$ rate would stop arbitrage possibilitiesarrow_forward
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