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Consider a firm in a single-period model whose assets are currently worth $10 million. At...

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Finance

Consider a firm in a single-period model whose assets are currently worth $10 million. At the end of the period, the assets will be worth either $20 million or $5 million. The firm has 1,000 shares of stock outstanding and 100 convertible bonds with a total face value of $6 million. Each bond has a conversion ratio of 10 shares. The bonds mature at the end of the period and the riskfree rate is assumed to be 10%. What is

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