Question
What is the volatility of merged firm? Firm A Firm B Value of the firm 120 175 Face Value Debt 80 60 Duration of Debt
What is the volatility 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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Personal Finance
Authors: Thomas Garman, Raymond Forgue
12th edition
9781305176409, 1133595839, 1305176405, 978-1133595830
