This preview shows page 1. Sign up to view the full content.
Unformatted text preview: shareholders have 3 equal portions of the company. That is, Frank has 1/3 of the debt, Cora another 1/3, and Mitch another 1/3. The debt doesnt need to be converted to equity. As for the debt-equity ratio, it can be defended by stressing the fair market value (600k market value of assets, 300k liabilities) of the assets rather than their tax basis (50k tax basis of assets, 300k of liabilities) to the corporation....
View Full Document
This note was uploaded on 02/22/2012 for the course ACCT 467 taught by Professor Ruhupatty during the Spring '12 term at Andrews Univeristy.
- Spring '12