Wilson Dover Inc.12Refer to the data for Wilson Dover Inc. What is the yield on Wilson Dover’s debt?
Wilson Dover Inc.12Refer to the data for Wilson Dover Inc. What is the yield on Wilson Dover’s debt?
The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover’s total value is 0.60, and the risk-free rate is 5%. Assume that N(d) = 0.9720 and N(d) = 0.9050.
a. 6.36%
b. 6.70%
c. 6.04%
d. 7.42%
e. 7.05%
Please explain your answers so I can compare with mine-thank you
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