Find what is the value of wilson dover debt

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Wilson Dover Inc.

The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050.

Problem 1: Refer to the data for Wilson Dover Inc. What is the value (in millions) of Wilson Dover's debt if its equity is viewed as an option?

Option a. $247.82

Option b. $167.57

Option c. $225.29

Option d. $204.81

Option e. $186.19

Reference no: EM132613731

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