Suppose the Current Value of a Firm's Assets Is $100

question 23

Multiple Choice

Suppose the current value of a firm's assets is $100 million,and the value of equity in the firm is $40 million.Suppose too that the firm has only one issue of debt outstanding: zero-coupon debt with a maturity of three years,and a face value of $70 million.Finally,suppose that the risk-free rate of interest is 4% (continuously-compounded terms) for all maturities.Assuming that firm value evolves according to a lognormal diffusion (as in Merton,1974) ,what is the volatility of the firm's assets?

• A)10.0%
• B)19.2%
• C)24.2%
• D)35.4%

Recognize the power of agency in Anthony Giddens's structuration theory.

Differentiate between practical consciousness and discursive consciousness.

Reflect on the literature's diverse approaches to agency and structure.

Distinguish between micro-level and macro-level agency.

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Definitions:

Collective Security

A system in which a group of nations agree to act together to defend any member country that is attacked, aiming to maintain international peace and security.

Irreconcilables

A group of U.S. senators who opposed the Treaty of Versailles and U.S. membership in the League of Nations after World War I, fearing it would limit national sovereignty.

Treaty of Versailles

The 1919 peace treaty that ended World War I, imposing punitive conditions on Germany and redrawing the map of Europe, significantly impacting future international relations.