Bryce Body Works has a zero coupon bond outstanding with a face value of $14 million...

Bryce Body Works has a zero coupon bond outstanding with a face value of $14 million that matures in 5 years. The market value of its assets is $17 million and the annual standard deviation of the return on the firm's assets is 27%. The risk-free rate is 1% (continuously compounded).

Part 1: What is the market value of the firm's equity (in $ million)?

Part 2: What is the value of the risky bond?

Part 3: What is the return on the risky bond?

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

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