Business, 15.08.2020 05:01 brownzackery71

Acort Industries owns assets that will have a 75% probability of having a market value of $52 million in one year. There is a 25% chance that the assets will be worth only $22 million. The current risk-free rate is 5%, and Acort's assets have a cost of capital of 10%. a) If Acort is unlevered, what is the current market value of its equity? b) Suppose instead that Acort has debt with a face value of $18 million due in one year. According to MM (i. e. perfect market), what is the value of Acort's equity in this case? c) What is the expected return of Aco

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Acort Industries owns assets that will have a 75% probability of having a market value of $52 millio...