Equity Viewed as an Option $\backslash (50\backslash \%\backslash ).$ Fethe's owners view their equity investment as an option, and they would like to know the value of their investment. entered as $1\mathrm{.}23,$ not $\backslash (1,230,000\backslash ).$ Round your answer to two decimal places. $\backslash$$ million not $\backslash (1,230,000\backslash ).$ Round the monetary value to two decimal places and percentage value to one decimal place. Debt worth today: $\backslash$$ million Yield on the debt: $\backslash \%$ place. New equity worth: $\backslash$$ million New yield on the debt: $\backslash \%$ Can you explain this? The value of the stock goes down and the value of the debt goes up because with lower risk, Fethe has less of a chance of a "home run".