The Current Market Value of the Assets of Nano Tek

question 29

Multiple Choice

The current market value of the assets of Nano Tek is $19.5 million.The market value of the equity is $7.5 million.The risk-free rate is 4.5 percent and the outstanding debt matures in 5 years.What is the market value of the firm's debt?

• A)$8.50 million
• B)$9.98 million
• C)$12.00 million
• D)$19.42 million
• E)$23.84 million

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Definitions:

Series RC

A circuit configuration consisting of a resistor and a capacitor connected in series.

Apparent Power

The product of the root mean square (RMS) voltage and current in an AC circuit, measured in Volt-Amperes (VA), representing the combination of true power and reactive power.

Series RC

A circuit configuration that features a resistor (R) and a capacitor (C) connected in sequence along a single loop, affecting the circuit's overall impedance.

Power Factor

The ratio of real power flowing to the load to the apparent power in the circuit in electrical engineering, measuring the efficiency with which the current is converted into useful work.