QUESTION 9 Martin Company has a $3,000 pure discount bond that comes due in one year. The
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QUESTION 9
- Martin Company has a $3,000 pure discount bond that comes due in one year. The risk-free rate of return is 4 percent. The firm's assets are expected to be worth either $3,500 or $2,600 in one year. Currently, these assets are worth $2,850. What is the current value of the firm's debt?
a. $1,867.99 b. $2,085.92 c. $2,214.34 d. $2,478.91 e. $2,655.56
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