Southern Goods has an estimated going-concern value of $2 million. As a result of negotiations the firms bankruptcy reorganization plan consists of $600,000 in new mortgage debt, $250,000 in subordinated debt, and $1,150,000 in new equity. Currently the firm has a mortgage of $823,000, other secured debt of $89,000, and unsecured debt of $1.34 million. According to the APR, what will the stockholders receive if they currently have 2 million shares with a par value of $1 each?

$0

$315,714 in new equity

$583,333 in a combination of new debt and equity securities

$1,150,000 in new equity

$940,000 in new equity