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April 21, 2014

Homework Help: Money

Posted by Sarah on Sunday, January 15, 2012 at 6:30pm.

It is possible for a company’s liabilities to exceed its assets. When this occurs, the owners’ equity is negative. Can this happen with market values? Why or why not?

I thought that it would not happen since market value is the price that equity, liabilities, and assets can be bought and sold and thus equity can't be a negative value.

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