Question
A firm has a loan from Bank A, a loan from Bank B, a senior bond, and a junior bond. The loan from Bank A
A firm has a loan from Bank A, a loan from Bank B, a senior bond, and a junior bond. The loan from Bank A has the highest priority, followed by the Bank B loan, followed by the senior bond. The junior bond has the lowest priority. The firm also has publicly traded shares. The Bank A loan has a face value of $200 million, the Bank B loan has a face value of $300 million, the senior bond has a face value of $100, and the junior bond has a face value of $100. The market value of the firm is $550 million. What is the market value of the bank loans, senior bond, junior bond, and shares?
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