Question
A firm issues a one-year bond with face value 1000 at time T and the firm's assets value is 1,500 and the volatility of the
A firm issues a one-year bond with face value 1000 at time T and the firm's assets value is 1,500 and the volatility of the firm's assets is 0.3. What is the distance to default of this firm in KMV model? What is the probability of default?
A. 13.4% B. 86.7% C. 4.7% D. 6.68%
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
