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We will assume that Nathans, Inc. has 3-year zero-coupon debt outstanding, which will pay $200 at maturity. The assets are valued at $175, ? =

We will assume that Nathans, Inc. has 3-year zero-coupon debt outstanding, which will pay $200 at maturity. The assets are valued at $175, ? = 0.20, r = 0.04, and the company does not pay a dividend. Using a Black-Scholes model, what is the value of the equity?

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