#1 drop down "equity value" (2.96M / 3.29M / 3.45M / 3.13M)

#2 drop down "debt value" (1.87M / 1.55M / 1.71M / 2.04M)

#3 drop down "debt yield" given. I will make sure to thumbs up if correct. Thank you!

13. Equity as an option Consider the case of Blue Gecko Pharmaceuticals: Blue Gecko Pharmaceuticals is a manufacturing firm. Blue Gecko's current value of operations, including debt and equity, is estimated to be $5 million. Blue Gecko has $2 million face-value zero coupon debt that is due in two years. The risk-free rate is 696, and the volatility of companies similar to Blue Gecko is 50%. Blue Gecko's performance has not been very good as compared to previous years. Because the company has debt, it will repay its loan, but the company has the option of not paying equity holders. The ability to make the decision of whether to pay or not looks very much like an option. Based on your understanding of the Black-Scholes option pricing model (OPM), calculate the following values and complete the table. (Note: Use 2.7183 as the approximate value of e in your calculations.) Values: Blue Gecko Pharmaceuticals Equity value Debt value Debt yield 8.55% 8.80% 8.72% 8.1596 Blue Gecko's management is implementing a risk mana l }ce its volatility. Complete the 13. Equity as an option Consider the case of Blue Gecko Pharmaceuticals: Blue Gecko Pharmaceuticals is a manufacturing firm. Blue Gecko's current value of operations, including debt and equity, is estimated to be $5 million. Blue Gecko has $2 million face-value zero coupon debt that is due in two years. The risk-free rate is 696, and the volatility of companies similar to Blue Gecko is 50%. Blue Gecko's performance has not been very good as compared to previous years. Because the company has debt, it will repay its loan, but the company has the option of not paying equity holders. The ability to make the decision of whether to pay or not looks very much like an option. Based on your understanding of the Black-Scholes option pricing model (OPM), calculate the following values and complete the table. (Note: Use 2.7183 as the approximate value of e in your calculations.) Values: Blue Gecko Pharmaceuticals Equity value Debt value Debt yield 8.55% 8.80% 8.72% 8.1596 Blue Gecko's management is implementing a risk mana l }ce its volatility. Complete the