Reorganization and liquidation-bankruptcy

Reference no: EM1344407

A business can be liquidated for $700,000, or it can be reorganized. Reorganization would require an investment of $400,000. If the company is reorganized, earnings are projects to be $150,000 per year, and the company would trade at a price/earnings ratio 8.0 times. Should the company be liquidated or reorganized.

Reference no: EM1344407

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