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2. Suppose a firm with a value of $100 million has a bond outstanding with a face value of $60 million that matures in
2. Suppose a firm with a value of $100 million has a bond outstanding with a face value of $60 million that matures in 8 years. the current interest rate is 9% and the volatility of the firm is 20% what is the probability that the firm will default on its debt if the expected return on the firm, u. is 10% ?what is the probability of default? (5 Points) O 5.10% 4.10% O 2.10% O 3.10%
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Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
9th Edition
73530700, 978-0073530703
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