Question: Based on an option valuation method, the EDF model: Based on an option valuation method, the EDF model: estimates the likelihood that the Z -

Based on an option valuation method, the EDF model:
Based on an option valuation method, the EDF model:
estimates the likelihood that the Z-score model is correct.
determines if the equity is mispriced.
calculates the market value of the lender's investment.
estimates the probability that the firms rating will change over a period of time.
estimates the probability that a firm will default over a specified period of time.

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