Lets go back to the Double-R Nutting Company. Suppose that Double-Rs bonds have a face value of $53. Its current market-value balance sheet is:

Book-Value Balance Sheet
Net working capital	$	35	Bonds outstanding	$	40
Fixed assets		25	Common stock		20
Total assets	$	60	Total liabilities and shareholders equity	$	60

Who would gain or lose from the following maneuvers?

a. Double-R pays a cash dividend of $25.

Stockholders

Bondholders

b. Double-R halts operations, sells its fixed assets for $9, and converts net working capital into $35 cash. It invests its $44 in Treasury bills.

Stockholders

Bondholders