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

---

Definitions:

Normally Distributed

Describes a bell-shaped frequency distribution that is symmetrical about the mean, indicating that data near the mean are more frequent in occurrence than data far from the mean.

Sample Size

The number of observations or data points collected in a study or used to represent a larger population.

Confidence Interval

A range of values that is likely to contain a population parameter, estimated from a sample data with a given level of confidence.

Sample Size

The number of observations or units chosen from a population to participate in a study.