Question: 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
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 for payroll, taxes, and vendors have been satisfied). The firm's current capital structure is as follows: Source of Capital Amount Unsecured Bonds $300,000 Mortgage Bonds $400,000 Preferred Stock $100,000 Common Stock $500,000 The common stockholders will receive ________ in the liquidation. A. $200,000 B. $333,333 C. $198,000 D. $500,000
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