Question
Sunlife Company has a $18,000 pure discount bond that comes due in one year. The risk-free rate of return is 3 percent. The firm's assets
Sunlife Company has a $18,000 pure discount bond that comes due in one year. The risk-free rate of return is 3 percent. The firm's assets are expected to be worth either $16,000 or $21,000 in one year. Currently, these assets are worth $19,000. What is the current value of the firm's debt?
| $15,807.64 | ||
| $16,920.39 | ||
| $16,454.78 | ||
| $15,398.20 | ||
| $17,530.66 |
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Risk Management And Financial Institutions
Authors: John C. Hull
3rd Edition
1118269039, 9781118269039
