1. Can someone please explain this finance stuff to me.?
ApCon has a value of $500 million if it continues to operate, but has outstandin
ng debt of $600 million. If ApCon declares bankruptcy, bankruptcy costs will equ
al $50 million, and the remaining $450 million will go to creditors. Instead of
declaring bankruptcy, ApCon proposes to exchange the firm's debt for a fraction
of its equity in a workout. The minimum fraction of the firm's equity that ApCon