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The Window Store will have a value of $139,000 if the economy does well this coming year and a value of $121,000 if the economy does poorly. The probability of a good economy is 68 percent. The firm owes its bondholders $63,000. The firm will only operate for one more year. What is the value of this firm to its shareholders?

Multiple Choice

  • $70,240
  • $68,500
  • $70,450
  • $73,550
  • $74,660

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