FM11 Ch 17 P08 Build a Model

6 06 input cell is c18 note that this looks different

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Unformatted text preview: 0.6 0.6 input cell is C18. Note that this looks different from 'the setup for the 10.7 0.7 dimensional data table in part a. 0.8 0.8 0.9 0.9 c. Repeat part b, but instead using a face value of debt of $5 million. What can you say about the difference between the graphs in part b and part c? Value of Debt Value of Equity Volatility Face Value of Debt Volatility Face Value of Debt 5 5 0.1 0.1 See the note above for part b that describes a 2-dimensional data table. 0.2 0.2 0.3 0.3 0.4 0.4 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8 0.9 0.9 The value of debt and equity change much more dramatically as the volatility changes when there is more debt. 1 of 1...
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This document was uploaded on 01/19/2014.

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