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A firm can be worth $60 or $195 with equal probability. The firms debt consists of a zero -coupon bond with a face value of

A firm can be worth $60 or $195 with equal probability. The firms debt consists of a zero -coupon bond with a face value of $245 that matures at the end of one year. Assume risk neutrality and a cost of capital of 9%. What is the value of this firms equity?

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