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Square File's assets are worth $260. It has $160 of zero-coupon debt outstanding that is due to be repaid at the end of two years.
Square File's assets are worth $260. It has $160 of zero-coupon debt outstanding that is due to be repaid at the end of two years. The risk-free interest rate is 5%, and the standard deviation of the returns on Square File's assets is 40% per year. Calculate the present value of the company's debt and equity. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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