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Suppose that you are examining a company as a potential acquisition target. Your analyst did a DCF analysis, and you know that the company has
Suppose that you are examining a company as a potential acquisition target. Your analyst did a DCF analysis, and you know that the company has a total (enterprise) value of $150 million. Your analyst looked at the numbers over time, and estimated that the volatility of its assets is 15%. You want to put in an offer to purchase all of the equity of the company, because that would give you control. The company has (zero-coupon) risky debt outstanding with a principal amount of $70 million. All of the debt is due in 2 years, and it all has the same seniority. The current risk-free interest rate is 1%. assuming this, what are the numbers i should put into a black scholes calculator to do parts d e and f
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Step: 1
BlackScholes Source Data for Purchase Situation In the event that you wish to value a call option to purchase all of the companys shares the following ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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