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Consider the following two merger candidates. The merger is for diversification purposes only with no synergies involved. Risk - free rate is 4 % .
Consider the following two merger candidates. The merger is for diversification purposes only with no synergies involved. Riskfree rate is Company A Market value of assets $ Face value of zero coupon debt$ Debt maturity years Asset return standard deviation The asset return standard deviation for the combined firm is How much more value will debtholders collectively receive after the mergekeep two decimal places Your
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