Suppose a ﬁrm has a total market value of $900 and outstanding debt with a face value of $850. The risk-free rate of interest is 6%. If the ﬁrm will have a value of either $650 or $900 next period,
What is the value of the debt in the ﬁrm?
A) $782.59
B) $788.92
C) $792.64
D) $800.00
E) $842.64

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The Answer of Suppose a ﬁrm has a total market value of $900 and outstanding debt with a face value of $850. The risk-free rate of interest is 6%. If the ﬁrm will have a value of either $650 or $900 next period,
What is the value of the debt in the ﬁrm?
A) $782.59
B) $788.92
C) $792.64
D) $800.00
E) $842.64

Suppose a ﬁRm Has a Total Market Value of $900