The current market value of the assets of Nano Tek is $16 million. The market value of the equity is $7.5 million. The risk-free rate is 4.5 percent and the outstanding debt matures in 5 years. What is the market value of the firm's debt?
A) $8.50 million
B) $9.98 million
C) $12.00 million
D) $19.42 million
E) $23.84 million
Correct Answer:
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