The assets of Jensen Explorers are currently worth $3,200. These assets are expected to be worth either $2,900 or $3,400 one year from now. The company has a pure discount bond outstanding with a $3,000 face value and a maturity date of one year. The risk-free rate is 3.5 percent. What is the value of the equity in this firm?

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The Answer of The assets of Jensen Explorers are currently worth $3,200. These assets are expected to be worth either $2,900 or $3,400 one year from now. The company has a pure discount bond outstanding with a $3,000 face value and a maturity date of one year. The risk-free rate is 3.5 percent. What is the value of the equity in this firm?

The Assets of Jensen Explorers Are Currently Worth $3,200