In: Finance
A company is obligated to pay its creditors $6,145 at the end of the year. If the value of the company's assets equals $5,863 at that time, what is the value of shareholders' equity?
If total assets are $5,863, the owners' equity is:
Owners' equity = Max[($5,863 - $6,145), 0]
Owners' equity = $0