The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050.

Refer to the data for Wilson Dover Inc. What is the yield on Wilson Dover's debt?

Answer rating: 100% (QA)

To calculate the yield on Wilson Dovers debt we need to use the BlackScholes model The Bl... View the full answer