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Monroe Company Has Total Assets, Liabilities, and Shareholders' Equity of $27,000

Question 49

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Monroe Company has total assets, liabilities, and shareholders' equity of $27,000, $20,000, and $7,000, respectively. Assume no material change occurred during the year to totals on the balance sheet. What amount of long-term debt must Monroe retire by issuing new shares of common stock issued in order to decrease its debt/equity ratio to 1.0?

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Actual debt/equity ratio = Average liabi...

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