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Use the information for the question(s) below.
Monsters Incorporated (MI) is ready to launch a new product.Depending upon the success of this product,MI will have a value of either $100 million,$150 million,or $191 million,with each outcome being equally likely.The cash flows are unrelated to the state of the economy (i.e.risk from the project is diversifiable) so that the project has a beta of 0 and a cost of capital equal to the risk-free rate,which is currently 5%.Assume that the capital markets are perfect.
-Assume that in the event of default,20% of the value of MI's assets will be lost in bankruptcy costs.Suppose that at the start of the year,MI has no debt outstanding,but has 5.6 million shares of stock outstanding.If MI does not issue debt,its share price is closest to:
Systemin
A plant peptide hormone involved in defense responses, signaling systemic responses to local damage or attack.
Brassinosteroids
A class of plant hormones that play key roles in plant growth, development, and stress responses, influencing processes from seed germination to flowering.
Oligosaccharins
Short-chain sugars that play a role in signaling and regulating plant growth and defense responses.
Methyl Salicylate
An organic compound used as a flavoring agent and in pain relief medications.
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