Find value of outstanding debt

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"Consider a project with a single risky cash flow in one year. The CF will be either $20,000 (with probability 0.1) or $2,000 (with probability 0.9). All investors are risk neutral. The interest rate is 0. What will be the value of equity if a firm with no other cash flows but $5,000 in face value of outstanding debt takes this project?"

Reference no: EM132899352

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