Wilson Dover Inc. The Total Value (Debt Plus Equity) of Wilson Dover Inc.is

question 28

Multiple Choice

Wilson Dover Inc.
The total value (debt plus equity) of Wilson Dover Inc.is $500 million and the face value of its 1-year coupon debt is $200 million.The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%.Assume that N(d₁) = 0.9720 and N(d₂) = 0.9050.
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-Refer to the data for Wilson Dover Inc.What is the value (in millions) of Wilson Dover's equity if it is viewed as an option?

• A) $228.77
• B) $254.19
• C) $282.43
• D) $313.81
• E) $345.19

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Definitions:

Finished Goods

Items that have gone through the production process and are now prepared for sale.

Manufacturer

A company or person that produces finished goods from raw materials in large quantities through various processes.

Ready For Sale

Indicates items or products are in a condition where they can be offered to customers for purchase.

Inventory Turnover

A financial ratio that measures how quickly a company sells and replaces its stock of goods within a period.