How much do equity holders get in liquidation

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Reference no: EM132039138

Consider a firm which has a value of $10 million if it is liquidated. The firm has $5.5 million senior debt and $7.5 million junior debt. The junior debt is comprised of 4m bond A due in 7 years and 3.5 million bond B due in two years

1) How much do holders of bond A get in liquidation?

2) How much do holders of bond B get in liquidation?

3) How much do equity holders get in liquidation?

Reference no: EM132039138

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