Question

Southern Goods has an estimated going-concern value of $2 million. As a result of negotiations the firm's bankruptcy reorganization plan consists of $600,000 in new mortgage debt, $250,000 in subordinated debt, and $1,150,000 in new equity. Currently the firm has a mortgage of $823,000, other secured debt of $89,000, and unsecured debt of $1.34 million. According to the APR, what will the stockholders receive if they currently have 2 million shares with a par value of $1 each

Answer 1

Answer:

$0

Explanation:

Based on the information given what the STOCKHOLDERS RECEIVE if they currently have 2million shares with a par value of $1 each will be $0 reason been that the Stockholder claims have the LOWEST PRIORITY in a bankruptcy based on the fact that the debts amount has exceeded the firm's value which means that there is $0 amount left for current shareholders.