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What will the value of equity be in perfect capital market

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Reference no: EM132940175

Question - Suppose our entrepreneur decides to sell the firm by splitting it into three securities: equity, $500 of debt, and a third security called a warrant that pays $210 when the firm's cash flows are high and nothing when the cash flows are low. Suppose that this third security is fairly priced at $60. What will the value of the equity be in a perfect capital market?

Reference no: EM132940175

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