Question: 5. A firm has debt with a face (book) value of 80. The future market value of the firm's assets is uncertain, but the

5. A firm has debt with a face (book) value of 80. The future market value of the firm's assets is uncertain, but the distribution of possible outcomes is shown in the table below. a. What is the market value of the firm's assets, debt, and equity? Throughout this question, ignore any need to discount to present value. Prob. Asset Value 0.1 0.2 0.4 0.2 0.1 50 100 200 300 350 b. Why is the market value of the debt different from the book value?

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