The current market value of the assets of ABCD is $86.28 million. The call option value on the firm's assets is $53.09 million.

Question

notka56 [123]

3 years ago

11

The current market value of the assets of ABCD is $86.28 million. The call option value on the firm's assets is $53.09 million.

What is the market value of the firm's debt

Business

1 answer:

Temka [501] · Answer 1 · 2022-07-13T04:33:02+03:00

Answer: $33.19 million

Explanation:

From the question, we are informed that the current market value of the assets of ABCD is $86.28 million and that the call option value on the firm's assets is $53.09 million.

The market value of the firm's debt will be the difference between the market value of assets and the call option value of the firm's assets. This will be:

= $86.28m - $53.09m

= $33.19 million