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A firm has 60% probability of being worth $100 million and a 40% probability of being worth $150 million. There is one bond outstanding that promises to pay $100 million at an interest rate of 4%. The cost of capital for the firm's projects is 8%.
-Refer to the information above. What are the current proportions of debt and equity financing used by the firm?
Property
Assets or possessions that can be owned or controlled by an individual, corporation, or government, including tangible and intangible items.
Restaurant
A business establishment where meals or refreshments may be purchased.
Hotel
An establishment that provides paid lodging on a short-term basis, often offering various amenities.
Creditor Beneficiaries
A third party who benefits from a contract made between two other parties, specifically when the contract's purpose is to repay a debt.
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