Current market value of equity


Acorn industries owns assets that will have an 80% probability of having a market value of $50 million in one year. There is a 20% chance that the assets will only be worth $20 million. The current risk free interest rate is 5% and Acorn's assets have a cost of capital of 10%. If Acorn is unlevered, what is the current market value of its equity?

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Finance Basics: Current market value of equity
Reference No:- TGS054266

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