A company has an asset value of 10 million with a standard


A company has an asset value of $10 million with a standard deviation of 15%. The company has $8 million face value of zero coupon risky debt outstanding. What is the market value of the debt if the debt matures in two years? Assume a risk free rate of 4% per year compounded continuously

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Financial Management: A company has an asset value of 10 million with a standard
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