Multiple Choice
A firm's current value is $10 billion. The firm has one-year zero-coupon debt with face value $7 billion. The standard deviation of firm asset value is $2 billion. What is the firm's "distance-to-default" as measured by the Moody's KMV approach?
A) 1.50
B) 2.00
C) 3.00
D) 7.00
Correct Answer:
Verified
Correct Answer:
Verified
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