8. Security and Seniority (S25.1) Proctor Power has fixed assets worth $200 million and net working capital

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8. Security and Seniority (S25.1) 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. (The amounts of the three issues are par or face values.) If the debt were due today, how much would each debtholder be entitled to receive?

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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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