Question
What is the debt value of merged firm? What is duration of debt of merged firm? Firm A Firm B Value of the firm 120
What is the debt value of merged firm?
What is duration of debt of merged firm?
Firm A
Firm B
Value of the firm
120
175
Face Value Debt
80
60
Duration of Debt
11
12
Volatility
30%
25%
Correlation cash flows
0.6
Risk-free rate
3%
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Understanding Basic Statistics
Authors: Charles Henry Brase, Corrinne Pellillo Brase
6th Edition
978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021
