The current market value of the assets of ABC, Inc. is $86 million. The market value of the equity is $43.28 million. What is the market value of the ﬁrm's debt?
A) cannot be determined from the information given
B) $21.36 million
C) $42.72 million
D) $64.08 million
E) $129.28 million

Question

Quizplus · Accepted Answer

The market value of the debt can be calculated by subtracting the market value of the equity from the total market value of the assets:

Debt = Total assets - Equity 
Debt = $86 million - $43.28 million 
Debt = $42.72 million

The Current Market Value of the Assets of ABC, Inc