A Company filed a voluntary bankruptcy petition, and the statement of affairs reflected the following amounts: Assets Estimated book value Current value Assets pledged with fully secured creditors P 800,000 P1,000,000 Assets pledged with partially secured creditors 500,000 400,000 Free assets 1,300,000 1,200,000 Liabilities are as follows: Liabilities with priority - P200,000 Fully secured creditors - 700,000 Partially secured creditors - 500,000 Unsecured creditors without priority - 1,500,000 Assume that assets are converted to cash at their current values, what is the expected dividend rate (in decimal form) for general unsecured creditors?
A Company filed a voluntary bankruptcy petition, and the statement of affairs reflected the following amounts: Assets Estimated book value Current value Assets pledged with fully secured creditors P 800,000 P1,000,000 Assets pledged with partially secured creditors 500,000 400,000 Free assets 1,300,000 1,200,000 Liabilities are as follows: Liabilities with priority - P200,000 Fully secured creditors - 700,000 Partially secured creditors - 500,000 Unsecured creditors without priority - 1,500,000 Assume that assets are converted to cash at their current values, what is the expected dividend rate (in decimal form) for general unsecured creditors?
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 21QTD
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A Company filed a voluntary bankruptcy petition, and the statement of affairs reflected the following amounts:
Assets | Estimated book value | Current value |
Assets pledged with fully secured creditors | P 800,000 | P1,000,000 |
Assets pledged with partially secured creditors | 500,000 | 400,000 |
Free assets | 1,300,000 | 1,200,000 |
Liabilities are as follows:
Liabilities with priority - P200,000
Fully secured creditors - 700,000
Partially secured creditors - 500,000
Unsecured creditors without priority - 1,500,000
Assume that assets are converted to cash at their current values, what is the expected
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