The current market value of the assets of Smethwell, Inc. is $54 million, with a standard deviation of 16 percent per year.

The current market value of the assets of Smethwell, Inc. is $54 million, with a standard deviation of 16 percent per year. The firm has zero-coupon bonds outstanding with a total face value of $40 million. These bonds mature in 2 years. The risk-free rate is 4 percent per year compounded continuously. What is the value of d1?    A.  1.32 B.  1.48 C.  1.67 D.  1.79 E.  2.06

69.

The current market value of the assets of Cristopherson Supply is $46.5 million. The market value of the equity is $28.7 million. The risk-free rate is 4.75 percent and the outstanding debt matures in 4 years. What is the market value of the firm's debt?    A.  $17.80 million B.  $19.80 million C.  $20.23 million D.  $22.66 million E.  $23.01 million Market value of debt = $46.5m - $28.7m = $17.8m

70.

The current market value of the assets of Nano Tek is $19.5 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 Market value of debt = $19.5m - $7.5m = $12m

71.	You need $12,000 in 6 years. How much will you need to deposit today if you can earn 11 percent per year, compounded continuously? Assume this is the only deposit you make.    A.  $6,000.00 B.  $6,048.50 C.  $6,179.25 D.  $6,202.22 E.  $6,415.69 PV = $12,000 × e-0.11(6) = $6,202.22