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GraduateStrong Inc. has the following balance sheet: Current Assets $1,875,000 Accounts Payable $375,000 Fixed Assets $1,875,000 Notes Payable $750,000 Subordinated Debentures $750,000 Total Debt $1,875,000
GraduateStrong Inc. has the following balance sheet:
Current Assets | $1,875,000 | Accounts Payable | $375,000 | |
Fixed Assets | $1,875,000 | Notes Payable | $750,000 | |
Subordinated Debentures | $750,000 | |||
Total Debt | $1,875,000 | |||
Common Equity | $1,875,000 | |||
TOTAL ASSETS | $3,750,000 | TOTAL LIABILITIES & EQUITY | $3,750,000 |
The trustee's costs total $281,250, and the firm has no accrued taxes or wages. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will common stockholders receive if a total of $2.5 million is received from sale of the assets?
A. | $625,000 | |
B. | $281,250 | |
C. | $1,875,000 | |
D. | $343,750 | |
E. | They will not receive any payment, since the firm has not enough proceeds from its assets. |
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