Proctor Power has fixed assets worth $200 million and net working capital worth

$100 million. It is financed partly by equity and partly by three issues of debt. These consist of $250 million of First Mortgage Bonds secured only on the company’s fixed assets,

$100 million of senior debentures, and $120 million of subordinated debentures. If the debt were due today, how much would each debtholder be entitled to receive?

Visit us at www.mhhe.com/bma Chapter 24 The Many Different Kinds of Debt 621 AppendixLO1