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johnpaech johnpaech
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6 years ago
Assume that in the event of default, 20% of the value of MI's assets will be lost in bankruptcy costs and suppose that MI has zero-coupon debt with a $125 million face value due next year.  The initial value of MI's equity is closest to:
A) $30 million
B) $29 million
C) $15 million
D) $24 million
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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anicidanicid
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6 years ago
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johnpaech Author
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6 years ago
Smart ... Thanks!
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Brilliant ツ
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