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Problem 5. Recalculate the value of the firm in Problem 4 by assuming a 60% chance of going bankrupt after 4 years. Bankruptcy costs of

Problem 5.

Recalculate the value of the firm in Problem 4 by assuming a 60% chance of going bankrupt after 4 years. Bankruptcy costs of $30,000 will be occurred in case of bankruptcy. The discount rate is 17%.

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