The following table shows some financial data for two companies: A B Total Asset $1,552.10 $1,565.70 EBITDA

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The following table shows some financial data for two companies:

A B

Total Asset $1,552.10 $1,565.70

EBITDA -60 70

Net Income + interest -80 24

Total Liabilities 814 1537.10

1. Calculate which has the higher probability of default.

Use the formula shown in Section 23-4 to calculate which has the higher probability of default.

2. What variables are required to use a market-based approach to calculate the probability that a company will default on its debt"

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Microeconomics

ISBN: 978-0321866349

14th canadian Edition

Authors: Christopher T.S. Ragan, Richard G Lipsey

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Question Posted: Feb 08, 2013 03:00 AM

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The following table shows some financial data for two companies: A B Total Asset $1,552.10 $1,565.70 EBITDA

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