A company has a zero coupon bond issue with a face value of $1 million that...

A company has a zero coupon bond issue with a face value of $1 million that matures in one year. The assets of the firm are currently valued at $1.2 million, but this amount is expected to either decrease to $1.1 million or increase to $1.5 million in a year's time. Assume the risk-free rate is 5%. What is the value of the equity? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.)

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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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