Aiyah, Inc. recently has had financial difficulty and is being liquidated by the Federal Bankruptcy Court. The firm has a liquidation value of $1,000,000 $400,000 from the fixed assets that served as collateral for the mortgage bonds and $600,000 from all other assets. The firm's current capital structure is as follows:
- Source of Capital Amount
- Unsecured bonds $500,000
- Mortgage bonds 400,000
- Preferred stock 100,000
- Common stock 500,000