Question: Using the graph below please answer questions a) -b): Value of the Stake of Bondholders of company XYZ at maturity of the debt Value of

Using the graph below please answer questions a) -b): Value of

Using the graph below please answer questions a) -b): Value of the Stake of Bondholders of company XYZ at maturity of the debt Value of Fim Assets $ 10 M a. Draw a graph for the value of the stake of shareholders of company XYZ at maturity of the debt. Be specific, indicate all important points and values on the graph, label the axes. b. Suppose that assets of XYZ can take the following values at maturity of debt: Probability 3096 3596 2096 15% value $35M $ 20 M $ 10M $7 M 1. Calculate the expected Value of Debt of XYZ at maturity of the debt. 2. Calculate the Expected Value of Equity of XYZ at the time of maturity of the debt

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