1 A B C D E 2 34 Rackin Pinion Corporation's assets are currently worth $1,030....

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1 A B C D E 2 34 Rackin Pinion Corporation's assets are currently worth $1,030. In one year, they will be worth either $1,000 or $1,270. The risk-free interest rate is 3.7 percent. Suppose the company has an outstanding debt issue with a face value of $1,000. a. What is the value of the equity? b. What is the value of the debt? The interest rate on the debt? Input Area: 5 6 Asset value $1,030 7 Asset value in 1 year $1,000 8 Asset value in 1 year $1,270 9 Risk-free rate 3.70% 10 Debt face value $1,000 11 12 (Use cells A6 to B10 from the given information to complete this question.) 13 14 Output Area: 15 16 Equity value 17 Debt value 18 Interest rate 19 20 21 LL F G H 1 A B C D E 2 34 Rackin Pinion Corporation's assets are currently worth $1,030. In one year, they will be worth either $1,000 or $1,270. The risk-free interest rate is 3.7 percent. Suppose the company has an outstanding debt issue with a face value of $1,000. a. What is the value of the equity? b. What is the value of the debt? The interest rate on the debt? Input Area: 5 6 Asset value $1,030 7 Asset value in 1 year $1,000 8 Asset value in 1 year $1,270 9 Risk-free rate 3.70% 10 Debt face value $1,000 11 12 (Use cells A6 to B10 from the given information to complete this question.) 13 14 Output Area: 15 16 Equity value 17 Debt value 18 Interest rate 19 20 21 LL F G H