A firm has debt with market value $20M. Its only asset is a building in midtown Manhattan, whose market value is $100M. Today was the start of the Great Recession and the market value of the building falls to $50M. The market value of the debt is unchanged. The equity of the firm is now: building in ity of the firing falls to steals the start (a) Overvalued (b) Undervalued (c) Not enough information to say 4. Everybody in the world, ercept for you believes in the CAPM. You are a small investor. and are offered two stocks with the following characteristics: Stock SD Beta A 20 1.5 B 30 0.9 You will hold these stocks by themselves. Which do you pick? (a) Stock A (b) Stock B (c) It depends on your risk preferences (d) Not enough information to say