What is the market value of the equity of the firm

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The current market value of the assets of Bigelow Inc. is $91 million, with a standard deviation of 19 percent per year. The firm has zero-coupon bonds outstanding with a total face value of $45 million. These bonds mature in 2 years. The risk-free rate is 4 percent per year compounded continuously. You are trying to estimate the market value of equity by viewing it as an option. What is the market value of the equity of the firm?

A) $49.47 million

B) $46.00 million

C) $51.47 million

D) $48.97 million

E) None of the above

Reference no: EM132265945

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