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Wilson Dover Inc. The Total Value (Debt Plus Equity) of Wilson Dover Inc.is

Question 28

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Wilson Dover Inc.
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 (σ) 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.

-Refer to the data for Wilson Dover Inc.What is the value (in millions) of Wilson Dover's equity if it is viewed as an option?


A) $228.77
B) $254.19
C) $282.43
D) $313.81
E) $345.19

Correct Answer:

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