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Please assume that one year ago you have invested in bonds issued at par by company NFC 04.02.2020 04.02.2019 5 5 10 10 8 11
Please assume that one year ago you have invested in bonds issued at par by company NFC 04.02.2020 04.02.2019 5 5 10 10 8 11 60 30 Number of shares issued (Millions) Nominal value of shares () Market Value of shares () Annualized volatility of share prices (%) Short-term Liabilities (Million ) Long-term Liabilities (Million ) Annualized volatility of Market Value of Assets (%) Market Value of Assets (Million ) 1-year interest rate (%) 70 40 30 20 20 25 100 130 0,05 0,1 Using the Merton model, assess the changes in the credit risk of NFC, assuming a drift of 20%/year, detailing your calculations and presenting any additional assumption you may be required to consider. Please assume that one year ago you have invested in bonds issued at par by company NFC 04.02.2020 04.02.2019 5 5 10 10 8 11 60 30 Number of shares issued (Millions) Nominal value of shares () Market Value of shares () Annualized volatility of share prices (%) Short-term Liabilities (Million ) Long-term Liabilities (Million ) Annualized volatility of Market Value of Assets (%) Market Value of Assets (Million ) 1-year interest rate (%) 70 40 30 20 20 25 100 130 0,05 0,1 Using the Merton model, assess the changes in the credit risk of NFC, assuming a drift of 20%/year, detailing your calculations and presenting any additional assumption you may be required to consider
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