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Determine the fair value of the liability for Wallaby Ltd

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Question - Wallaby Ltd and Dingo Ltd enter into a contractual obligation to pay cash of $500 to Bandicoot Ltd in five years' time. Wallaby Ltd has a AA credit rating and can borrow at 6%, while Dingo Ltd has a BBB credit rating and can borrow at 12%. Determine the fair value of the liability for Wallaby Ltd and Dingo Ltd.

Reference no: EM132562310

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