Wilson Dover Inc. The Total Value (Debt Plus Equity) of Wilson Dover Inc.is

question 28

Multiple Choice

Wilson Dover Inc.
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(d₁) = 0.9720 and N(d₂) = 0.9050.
​
-Refer to the data for Wilson Dover Inc.What is the value (in millions) of Wilson Dover's equity if it is viewed as an option?

• A) $228.77
• B) $254.19
• C) $282.43
• D) $313.81
• E) $345.19

---

Definitions:

Straight-Line Depreciation

A method of allocating an asset's cost evenly across its useful life.

Income Tax Rate

This is the percentage at which an individual or corporation is taxed on their income.

Unearned Revenue

Money received by an entity for goods or services to be provided in the future, recognized as a liability until the service is performed.