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Consider a firm with the following financial characteristics: Assets Book Value Market Value Liabilities and Equity Book Value Market Value Cash $1,000 $1,000 Long-term Bonds
Consider a firm with the following financial characteristics:
Assets | Book Value | Market Value | Liabilities and Equity | Book Value | Market Value |
Cash | $1,000 | $1,000 | Long-term Bonds | $1,500 | $1,500 |
Fixed Assets | 2,000 | 500 | Equity | 1,500 | - |
Total | $3,000 | $1,500 | Total | $3,000 | $1,500 |
A. Assuming the firm is liquidated today, how much do the long-term bondholders and shareholders receive?
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