Question
Finance Electric Company is being liquidated. The firm owes $560,000 to the mortgage holder and $130,000 to other secured creditors. The firm also owes $340,000
Finance Electric Company is being liquidated. The firm owes $560,000 to the mortgage holder and $130,000 to other secured creditors. The firm also owes $340,000 to its unsecured creditors. The total sum for wage and benefit payments, consumer claims, and the administrative costs of liquidation is $330,000. The firm owes 0 taxes. The building, which is mortgaged, netted $840,000 after selling costs. The remaining assets have yielded $450,000 in the net proceeds. The book value of equity is $250,000. How much will the unsecured creditors receive for each dollar they are owed?
A. $0
B. $0.0059
C. $0.7941
D. $1
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