What is liquidity a measure of

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Question a

What is liquidity a measure of? Discuss the potential merits of high liquidity verses low liquidity.

Question b

You are reviewing the books of a firm you are considering purchasing and notice a considerable difference between the market value of some assets and the book value. Why might there be a difference?

Question c

If you consider purchasing a firm what is the firm's enterprise value based on? (Hint: consider this in terms of the balance sheet entities). Comment on the difference between 'enterprise value' and 'market value'.

Reference no: EM132338346

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