Question
A firm is currently valued at $175 in a boom and $110 in a recession. The chance of either economic state occurring is 50 percent.
A firm is currently valued at $175 in a boom and $110 in a recession. The chance of either economic state occurring is 50 percent. The firm owes $120 to its debt holders. What is the value of the firm to the shareholders in a recession?
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Smart Supply Chain Finance
Authors: Hua Song
1st Edition
9811659966, 978-9811659966
