Multiple Choice
The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility () of Wilson DOver's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050.
-is the yield on Wilson Dover's debt?
A) 6.04%
B) 6.36%
C) 6.70%
D) 7.05%
E) 7.42%
Correct Answer:
Verified
Correct Answer:
Verified
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