Your firm has $2,100,000 in stock assets with a duration of 12 and $900,000 in cash with a duration of 0. Your firm has issued debt with a present value of $1,700,000 and a duration of 16. The yield curve is flat at 4.35%. a) What is the value of equity? b) What is the duration of equity?

Your firm has $2,100,000 in stock assets with a duration of 12 and $900,000 in cash with a duration of 0. Your firm has issued debt with a present value of $1,700,000 and a duration of 16. The yield curve is flat at 4.35%. a) What is the value of equity? b) What is the duration of equity?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 16MC

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a) What is the value of equity?

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