Equity Viewed as an Option Arethe Inc. is a custom manufacturer of guitars, mandolins, and other stringed instruments and is located near Knoxville, Tennessee, ethe's current value of operations, which is also its value of debt plus equity, estimated to be $60 million Fethe has 530 million face value, zero coupon debt that is due in 5 year. The risk free rates and the standard deviation of returns for companies similar to fethe is 30%. Fethe's owners view their equity investment as an option, and they would like to know the value of their investment Using the Black Scholes option pricing model how much is Fathe's equity worth? Do not round intermediate calculations. Enter your answer in millions. For example, an mwer of $1.23 million should be entered 123, no 1,230,000. Round your answer to two decimal places $ mon 1. How much is the debt worth today? What is yold? Do not found intermediate calculations. Enter your answer for debt worth in millions. For example, an answer of 51.23 million should be entered 1.23, no 1,230,000 Hound the monetary value to two decimal places and percentage value to one decimal place Debt worth today million Yield on the debt How would the equity vaion and the yield on the debt change it rethe's managers could use risk management techniques to reduce its volatility to 2047 Do not round intermediate calculations. Enter your answer for equity worth in million Yor example, an answer of $1.23 million should be entered a 1.23, not 1,250,000 Hound the monetary value to the decimal places and percentage value to one omal place New equity worth: $ million Now held on the debt: Can you on this The value of the stock goes down and the value of the debt goes up because with lower risk, Fether has selector a chance of a home run Equity Viewed as an Option Arethe Inc. is a custom manufacturer of guitars, mandolins, and other stringed instruments and is located near Knoxville, Tennessee, ethe's current value of operations, which is also its value of debt plus equity, estimated to be $60 million Fethe has 530 million face value, zero coupon debt that is due in 5 year. The risk free rates and the standard deviation of returns for companies similar to fethe is 30%. Fethe's owners view their equity investment as an option, and they would like to know the value of their investment Using the Black Scholes option pricing model how much is Fathe's equity worth? Do not round intermediate calculations. Enter your answer in millions. For example, an mwer of $1.23 million should be entered 123, no 1,230,000. Round your answer to two decimal places $ mon 1. How much is the debt worth today? What is yold? Do not found intermediate calculations. Enter your answer for debt worth in millions. For example, an answer of 51.23 million should be entered 1.23, no 1,230,000 Hound the monetary value to two decimal places and percentage value to one decimal place Debt worth today million Yield on the debt How would the equity vaion and the yield on the debt change it rethe's managers could use risk management techniques to reduce its volatility to 2047 Do not round intermediate calculations. Enter your answer for equity worth in million Yor example, an answer of $1.23 million should be entered a 1.23, not 1,250,000 Hound the monetary value to the decimal places and percentage value to one omal place New equity worth: $ million Now held on the debt: Can you on this The value of the stock goes down and the value of the debt goes up because with lower risk, Fether has selector a chance of a home run
