A firms assets have a market value of 500m the asset, Ask an Expert

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A firm's assets have a market value of $500m; the asset returns have a standard deviation of 25% per year.

The firm is financed with zero coupon debt having a face value of $400m and maturing in 5 years. The (continuously compounded) risk free rate is 5%.

What is the value of the debt and the equity?

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Corporate Finance, Finance

Category:- Corporate Finance
Reference No.:- M9617828

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