Question: A firm is worth $75 or $210 with equal probability and is financed with debt that has a face 16 value of $80. It is

A firm is worth $75 or $210 with equal probability and

A firm is worth $75 or $210 with equal probability and is financed with debt that has a face 16 value of $80. It is considering a new project that is equally likely to be worth -$50 or +$55. The cost of capital is 12% for all securities. Refer to the information above. Calculate the present values of the firm's debt and equity, assuming that the project is not undertaken A Debt 80; Equity 47.23 B Debt 69.2; Equity 58.04 C Debt 63.62; Equity 63.62 Debt 80; Equity 62.5 D

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