Risk-free debt outstanding

by | Sep 10, 2021 | Homework Help

Firm X has $25 million of risk-free debt outstanding.  This debt has an annual coupon rate of 6% and matures in 2 years.  Coupons are paid once per year.  The current term structure is flat at 10% per year, compounded annually.What is the current market value of the firm’s debt?

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