Question: Use the Merton (1974) model to solve the approximate probability of default for a corporate debt issuer that has: current assets value - $24M, outstanding

Use the Merton (1974) model to solve the approximate probability of default for a corporate debt issuer that has: current assets value - $24M, outstanding debt at maturity --S20M, there are 3 more months until debt maturity, risk free interest rate = 3.5%, assets volatility (standard deviation) - 45% per annum. 34% 99% 23% 78% 92%

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