The current value of a firm is $1,400. The firm has $1,000 in pure discount debt due

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The current value of a firm is $1,400. The firm has $1,000 in pure discount debt due in one year and the risk-free rate is 6%. The firm's assets will be worth either $1,200 or $1,500 in one year. What is the current value of the firm's debt?
A. $318
B. $421
C. $457
D. $943
E. $1,400

Posted Date: Nov 22, 2021 09:05 PM

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The current value of a firm is $1,400. The firm has $1,000 in pure discount debt due

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The value of the pure discount debt 1000 The riskfree rate r 6 006 The ... View the full answer

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