Spreadsheet

A. Fothe Inc. is a custom manufacturer of guitars, mandolins, and other stringed instruments and is located near Knoxville, Tennessee, Fethe's current value of operation, which she is of debt plus equity is estimated to be 56 million, Fethelas 2 million face value, zaro coupon debt that is due in 2 years. The risk free rate is and the standard deviation of returns for companies similar to Pothe la 60%. Fethe's owners is their equity Investment as an option and would to know the value of their investment The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question be Open spreadsheet 2. Using the Black-Scholes option pricing model, how much is Father's equity worth Enter your answer in millions. For example, an answer of $1.21 million should be entered as 1.21. not 1.210.000. Do not round Intermediate calculations. Round your answer to two decimal places $ million b. How much is the debt worth today? Enter your ancer in million. For example, an answer of 1.1.21 million should be entered as 1.21. not 1.210,000. Do not round intermediate calculations. Round your answer to two decimal places. 5 million What is its yield? Do not round intermediate calculations. Round your answer to one decimal place C. How would the equity value change if fethe's managers could use risk management techniques to reduce a volatility to 304? Enter your answer in milion. For tample, an answer of 51.21 milion should be entered as 1.21. not 1,210.000. Do not found intermediate calculations. Round your answer to bio decimal places New equity values + million How would the yield on the debe changes Fathe's managers could use risk management techniques to reduce its volatility to 30467 Do not round intermediate calculations. Round you answer to che decimal place the yield on the desti Home File Insert Draw Page Layout Formulas Data Review View V V BBCv Av ... v v Arial V vab E B10 fx $6,000,000 $2,000,000 4.00% 60.00% 2 ONCO 1 Equity Viewed as an Option 2 3 Value of operations, P 4 Value of zero coupon debt, X 5 Risk-free rate, TRE 6 Standard deviation of returns, o 7 Time (in years) 8 9 Black-Scholes Option Pricing Model: 10 d 11 N(d) 12 dz 13 N(02) 14 Value of firm's equity, V 15 Value of firm's debt D 17 Yield on debt.ro 18 19 Change in Standard Deviation of Returns a 20 Standard deviation of returns, o 21 Formulas #N/A #N/A #N/A #N/A #N/A #N/A #N/A 18 8 5 di | 30.00% A. Fothe Inc. is a custom manufacturer of guitars, mandolins, and other stringed instruments and is located near Knoxville, Tennessee, Fethe's current value of operation, which she is of debt plus equity is estimated to be 56 million, Fethelas 2 million face value, zaro coupon debt that is due in 2 years. The risk free rate is and the standard deviation of returns for companies similar to Pothe la 60%. Fethe's owners is their equity Investment as an option and would to know the value of their investment The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question be Open spreadsheet 2. Using the Black-Scholes option pricing model, how much is Father's equity worth Enter your answer in millions. For example, an answer of $1.21 million should be entered as 1.21. not 1.210.000. Do not round Intermediate calculations. Round your answer to two decimal places $ million b. How much is the debt worth today? Enter your ancer in million. For example, an answer of 1.1.21 million should be entered as 1.21. not 1.210,000. Do not round intermediate calculations. Round your answer to two decimal places. 5 million What is its yield? Do not round intermediate calculations. Round your answer to one decimal place C. How would the equity value change if fethe's managers could use risk management techniques to reduce a volatility to 304? Enter your answer in milion. For tample, an answer of 51.21 milion should be entered as 1.21. not 1,210.000. Do not found intermediate calculations. Round your answer to bio decimal places New equity values + million How would the yield on the debe changes Fathe's managers could use risk management techniques to reduce its volatility to 30467 Do not round intermediate calculations. Round you answer to che decimal place the yield on the desti Home File Insert Draw Page Layout Formulas Data Review View V V BBCv Av ... v v Arial V vab E B10 fx $6,000,000 $2,000,000 4.00% 60.00% 2 ONCO 1 Equity Viewed as an Option 2 3 Value of operations, P 4 Value of zero coupon debt, X 5 Risk-free rate, TRE 6 Standard deviation of returns, o 7 Time (in years) 8 9 Black-Scholes Option Pricing Model: 10 d 11 N(d) 12 dz 13 N(02) 14 Value of firm's equity, V 15 Value of firm's debt D 17 Yield on debt.ro 18 19 Change in Standard Deviation of Returns a 20 Standard deviation of returns, o 21 Formulas #N/A #N/A #N/A #N/A #N/A #N/A #N/A 18 8 5 di | 30.00%