The Current Market Value of the Assets of ABC,Inc

question 46

Multiple Choice

The current market value of the assets of ABC,Inc. is $86 million. The market value of the equity is $43.28 million. What is the market value of the firm's debt?

• A) Cannot be determined from the information given.
• B) $21.36 million
• C) $42.72 million
• D) $64.08 million
• E) $129.28 million

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Definitions:

Significant Influence

The capacity of an investor to affect the financial or operating policies of an investee, typically through ownership of a significant but not majority share.

Retained Earnings

The portion of a company's profit that is held or retained and not paid out as dividends to shareholders.

Interest Rate Swap

A financial derivative contract in which two parties agree to exchange one stream of interest payments for another, based on a specified principal amount.