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The core question is - is debt accounted for in a company's book value?
Yes. Book Value (or Shareholders Equity) is Assets - Liabilities.

If a company has a book value of $1 billion, and $500 million in debt, would shareholders receive $1 billion upon liquidation, or only $500 million?
In theory, $1 billion. In reality, the current market value of the assets less liabilities may be more or less than book value. Liquidations can be distress sales and assets such as inventory and equipment may have to be sold at below market values. Real estate assets may be carried at the price paid years ago, but may have appreciated since then.
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