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

question 1

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 yield on Wilson Dover's debt?

• A) 6.04%
• B) 6.36%
• C) 6.70%
• D) 7.05%
• E) 7.42%

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