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 persent.
A firm is currently valued at $175 in a boom and $110 in a recession. the chance of either economic state occurring is 50 persent. the firm owesn$120 to its debt holders. what is value of the firm to the shareholders in a recession?
A) $22.50
B) $0
C) $27.50
D) -$10.00
E) $55.00
PLEASE SHOW ME THE CORRECT ANSWER AND HOW TO DO IT
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School Finance Elections
Authors: Don E. Lifto, Bradford J. Senden, Daniel A. Domenech
2nd Edition
1607091488, 978-1607091486
