The Current Market Value of the Assets of Cristopherson Supply

question 16

Multiple Choice

The current market value of the assets of Cristopherson Supply is $46.5 million.The market value of the equity is $28.7 million.The risk-free rate is 4.75 percent and the outstanding debt matures in 4 years.What is the market value of the firm's debt?

• A)$17.80 million
• B)$19.80 million
• C)$20.23 million
• D)$22.66 million
• E)$23.01 million

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Definitions:

Physical Assets

Tangible objects that hold value, such as real estate, machinery, vehicles, or commodities, often used in the production of goods and services.

Opportunity Cost

The value of the next best alternative forgone as a result of making a decision.

Private Ownership

The holding of property by non-governmental legal entities or individuals.

Conservation Of Resources

Involves managing natural resources wisely to prevent depletion and ensure sustainability for future generations.