Question
A Company has a current value of $10,000 and debt outstanding consisting of a zero-coupon bond with a face value of $10,000 due in one
A Company has a current value of $10,000 and debt outstanding consisting of a zero-coupon bond with a face value of $10,000 due in one year. Risk-free rate is 13% per year. Assume the value of firm's assets will either increase by 15% or decrease by 15%. What is the current value of the firm's debt ?
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Personal Finance And Investments
Authors: Keith Redhead
1st Edition
0415428629, 978-0415428620
