Suppose that a firm has $5$ bondholders each expecting to be paid today their principal of $$1$ million each.$$ The firm is in default, as its going$-$concern value is only $$3$ million, falling short of the $$5$ million to be repaid.$$ The firm could liquidate and sell all of its assets for a value of $$1$ million, so that each bondholder would recover $$200,000$ on their claim.$$ The firm offers its bondholders a debt$-$for$-$equity swap, but four of out the five bondholders must participate and become equityholders for the swap to succeed.$$ In the table below, calculate the "lower bound" payoff if only four bondholders participate and the "upper bound" payoff if all five bondholders participate. The correct answer is lower bound$=$$$500,000$ and upper bound$=$$$600,000$