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All else the same, which of the following is the most correct about Altman Z\'s

ID: 2733994 • Letter: A

Question

All else the same, which of the following is the most correct about Altman Z's bankrupcty prediction model?

The firm that has larger total assets will have lower chances of going bankrupt.

The firm that has smaller net working capital will have lower chances of going bankrupt.

A firm that gives larger dividends and retains less of its net income will have lower chances of going bankrupt.

A firm that has higher share price and market value of equity compared to its liabilities will have lower chances of going bankrupt.

The firm that has larger total assets will have lower chances of going bankrupt.

The firm that has smaller net working capital will have lower chances of going bankrupt.

A firm that gives larger dividends and retains less of its net income will have lower chances of going bankrupt.

A firm that has higher share price and market value of equity compared to its liabilities will have lower chances of going bankrupt.

Explanation / Answer

A firm that has higher share price and market value of equity compared to its liabilities will have lower chances of going bankrupt.

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