Rackin pinion corporationrsquos assets are currently worth, Ask an Expert

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Rackin Pinion Corporation’s assets are currently worth $1,180. In one year, they will be worth either $1,140 or $1,430. The risk-free interest rate is 6 percent. Suppose the company has an outstanding debt issue with a face value of $1,000.

a. What is the value of the equity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Equity value $

b-1. What is the value of the debt? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Debt value $

b-2. What is the interest rate on the debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number, e.g., 32.)

Interest rate %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92868377

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