ABC Co is undertaking a new project. If the project is successful, the value of the firm a year will be $750 million, but if it turns out to be a failure, the firm will be worth only $250 million The current value of the firm is $400 million The firm has outstanding bonds due in a year with a face value of $350 million The T-bill rate is 7 percent. 

What is the value of the equity? What is the value of the debt?

Answer rating: 100% (QA)

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