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For Next Year,the Probability the Economy Will Do Well Is

Question 3

Multiple Choice

For next year,the probability the economy will do well is 82 percent,and Importers Unlimited will have a firm value of $68,000.If the economy tanks,the firm's value will decline to $43,000.The firm owes its bondholders $50,000.What is the value of this firm to its shareholders if the firm will close after next year?


A) $14,760
B) $13,380
C) $18,000
D) $16,410
E) $13,520

Correct Answer:

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