Question
1. What is the yield on Wilson Dover's debt? If the following is true: Total value = P = $500.0d1 = 1.910485 Debt = X
1. What is the yield on Wilson Dover's debt? If the following is true:
Total value = P = $500.0d1 = 1.910485
Debt = X = $200.0N(d1) = 0.9720
Volatility (s) = 0.6d2 = 1.310485
rRF = 5%N(d2) = 0.9050
2.What is the value of the firm according to MM with corporate taxes? If the following is true: EBIT: $100,000rd: 12%Tc: 30% Debt: $500,000rsU: 16%
3.What is the firm's cost of equity? If the following is true: EBIT: $100,000rd: 12%Tc: 30% Debt: $500,000rsU: 16%
4.What is the value (in millions) of Wilson Dover's equity if it is viewed as an option? If the following is true: Total value = P = $500.0d1 = 1.910485 Debt = X = $200.0N(d1) = 0.9720 Volatility (s) = 0.6d2 = 1.310485 rRF = 5%N(d2) = 0.9050
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