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Impala Holidays PLC, a firm financed by both debt and equity, is undertaking a new project. If the project is successful, the value of
Impala Holidays PLC, a firm financed by both debt and equity, is undertaking a new project. If the project is successful, the value of the firm in one year will be 450 million, but if the project is a failure, the firm will be worth only 300 million. The current value of Impala is 350 million, a figure that includes the prospects for the new project. Impala has outstanding zero coupon bonds due in one year with a face value of 380 million. Treasury bills that mature in one year yield 7% EAR. Impala pays no dividends. Use a two state (binomial) option pricing model to find the current value of Impala's equity. Enter your answer in to the nearest . If you think the answer is 123,456,789.01, enter 123456789 (there is a +/-1000 margin for error) Answer:
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