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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 407 Weeks Ago, 6 Days Ago |
| Questions Answered: | 66690 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Valuing Equity When There Are Multiple Securities
Suppose our entrepreneur decides to sell the firm by splitting it into three securities: equity, $500 of debt, and a third security called a warrant that pays $210 when the firm’s cash flows are high and nothing when the cash flows are low. Suppose that this third security is fairly priced at $60. What will the value of the equity be in a perfect capital market?
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