Make the same assumptions as in Problem 15.17. Firm A decides to use some of its cash

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Make the same assumptions as in Problem 15.17. Firm A decides to use some of its cash in order to purchase marketable securities. This has the effect of leaving its value, VA, unchanged but increasing its instantaneous standard deviation from .2 to .3. What are the new values of debt and equity?
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Financial Theory and Corporate Policy

ISBN: 978-0321127211

4th edition

Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri

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