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show your calculations and your assumptions You are an owner of a firm that has cash flows of $150 (good state) or $50 (bad state)
show your calculations and your assumptions
You are an owner of a firm that has cash flows of $150 (good state) or $50 (bad state) next year with equal probability. Your firm has senior debt with face value $70 and junior debt with face value $10 outstanding. Ignore taxes and time value of money. (18 marks) a. What is the market value of equity? (6 marks) Step by Step Solution
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