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Find what is market value of abc debt based on black-scholes

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Question 1: XYZ Inc. has an issue of zero-coupon bond outstanding with a $1,800,000 face value that matures in one year. The market value of ABC's assets is $2,050,000 and the standard deviation of returns on assets is 46 %. The risk-free rate is 2.9% compounded continuously. What is the market value of ABC's debt based on the Black-Scholes model?

Reference no: EM132869575

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