Market Value of Assets = $210 million; Payment to Senior Secured = $80 million; Remaining asset after payment to senior secured = 210 - 80 = $130

Market Value of Assets = $210 million;

Payment to Senior Secured = $80 million;

Remaining asset after payment to senior secured = 210 - 80 = $130 million;

Payment to Senior Unsecured = $120 million;

Remaining asset after payment to senior unsecured = 130 - 120 = $10 million;

Since remaining asset is only $10 million, this goes to Subordinated.

Only if any funds remain from liquidation of asset, it will go to preferred equity holders and the last recipients are the common shareholders.

This is the reason why cost of equity is high and cost of senior secured debt is the lowest.

1.     In the US, "Face Value" = $________.