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The annualized asset volatility is 10 according to the kmv

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You are given the following information about a firm. The market value of assets at time 0 is 1,000; at time 1 is 1,200. Short-term debt is 500; long-term debt is 300. The annualized asset volatility is 10%. According to the KMV model, what are the default point and the distance to default at time 1?

A. 800 and 3.33

B. 650 and 7.50

C. 650 and 4.58

D. 500 and 5.83

Reference no: EM13568195

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