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Unformatted text preview: common stock. It said it would use the funds generated by these actions to pay down existing debt and to increase its liquidity. Explain how the sale of plant assets could improve the company's solvency. Answer: A common measure of solvency is the debt to total assets ratio. By selling some of its fixed assets and using the cash to pay off debt, the company would reduce its reliance on debt financing and improve its debt to assets ratio....
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 201 taught by Professor - during the Spring '11 term at Montgomery.
- Spring '11