Business, 23.12.2019 19:31 cloudFF

buckeye industries has a bond issue with a face value of $1,000 that is coming due in one year. the value of buckeye’s assets is currently $1,220. urban meyer, the ceo, believes that the assets in the firm will be worth either $930 or $1,450 in a year. the going rate on one-year t-bills is 5 percent.

a-1 what is the value of the company’s equity? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

value of equity $

a-2 what is the value of the debt? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

value of debt $

suppose the company can reconfigure its existing assets in such a way that the value in a year will be $930 or $1,730.

b. if the current value of the assets is unchanged, what is the new value of the company's equity? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

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