Chapter 3, Problem 21P

a)

Summary Introduction

To discuss: Whether selling of new equity shares and use those proceeds to buy a new plant site will actually achieve the objective of improving liquidity of the company.

b)

Summary Introduction

To discuss: Whether using marketable securities and cash to pay-off accounts receivables and bank borrowings will actually achieve the objective of improving liquidity of the company.

c)

Summary Introduction

To discuss: Whether borrowing long-term debt and use those proceeds to pay off short-term debt will actually achieve the objective of improving liquidity of the company.

d)

Summary Introduction

To discuss: Whether selling the surplus fixed assets and use those proceeds to marketable securities will actually achieve the objective of improving liquidity of the company.