Aiyah Inc recently has had financial difficulty and is being

Aiyah, Inc. recently has had financial difficulty and is being Liquidated by the Federal Bankruptcy Court. The firm has a Liquidation value of $1,000,000-$400,000 from the fixed assets that served as collateral for the mortgage bonds and $600,000 from all other assets (all prior claims have been satisfied). The firms current capital structure is as follows: The common stockholders will receive _____ in the Liquidation.

Solution

Ans:

D) $0

=$10,000,000 - ($500,000+$400,000+$100,000)

=$0