Question
You have observed the following information on two firms: A B Asset 1600 1565 EBITDA -60 70 Net income -80 24 Liabilities 1275 750 asset
You have observed the following information on two firms:
|
| A | B |
| Asset | 1600 | 1565 |
| EBITDA | -60 | 70 |
| Net income | -80 | 24 |
| Liabilities | 1275 | 750 |
| asset |
|
|
| Volatility | 50% | 20% |
Without relying on a specific model, which firm would have a higher probability of default under a credit scoring model? Which firm would have a higher probability of default under a market model? Provide explanations for both.
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Executive Finance And Strategy
Authors: Ralph Tiffin
1st Edition
0749471506, 978-0749471507
