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What is the minimum fraction of the? firm

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Suppose Tefco Corp. has a value of ?$104 million if it continues to? operate, but has outstanding debt of ?$139 million that is now due. If the firm declares? bankruptcy, bankruptcy costs will equal ?$30?million, and the remaining ?$74 million will go to creditors. Instead of declaring? bankruptcy, management proposes to exchange the? firm's debt for a fraction of its equity in a workout. What is the minimum fraction of the? firm's equity that management would need to offer to creditors for the workout to be? successful?

Reference no: EM132554860

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