The assets of Green Light Specials are currently worth $2,100.These assets are expected to be worth either $1,800 or $2,300 one year from now.The company has a pure discount bond outstanding with a $2,000 face value and a maturity date of one year.The risk-free rate is 5 percent.What is the value of the equity in this firm?
A) $166.67
B) $231.43
C) $385.71
D) $405.00
E) $714.29
Correct Answer:
Verified
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