(Capital Structure Theory) Assuming that (V_{T}) has a lognormal distribution and (V_{t}) follows a GBM, show the...
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(Capital Structure Theory) Assuming that \(V_{T}\) has a lognormal distribution and \(V_{t}\) follows a GBM, show the impact of volatility on the value of debt and equity at the various critical threshold levels of a "Call Option Enhanced Reverse Convertible" (see Pennacchi et al. 2010).
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