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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. Risk-free rate is 4%. Company A Market value of assets $ 500 Face value of zero coupon debt$500 Debt maturity 4 years Asset return standard deviation 50% The asset return standard deviation for the combined firm is 20%. How much more value will debtholders collectively receive after the merge(keep two decimal places)? Your

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