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15 September, 06:57

Sally is planning to sell her company and she prefers to obtain immediate liquidity, and the value of consideration to be fixed. She should choose:A. A cash saleB. An IPOC. A stock-for-stock combinationD. None of these are correct

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  1. 15 September, 08:55
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    Answer: A cash sale

    Explanation: In simple words, liquidity refers to the ability of an organisation to bear its short term expenses. For that a company must have cash or some assets that can be readily converted into cash in case of need.

    Hence Sally should sell her company in cash sale as it will result in inflow of cash which will create liquidity and also the consideration will be certain with short timely payments.

    Other option such as IPO or stock for stock might result in increase in value but certainly won't give her liquidity.
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