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Business, 28.06.2019 04:10 dbenitezmontoya3

You are trying to decide whether to buy stock in company x or company y. both companies need $1,000 capital investment and will earn $200 in good years (with probability 0.5) and $60 in bad years. the only difference between the companies is that company x is planning to raise all of the $1,000 needed by issuing equity while company y plans to finance $500 through equity and $500 through bonds on which 10 percent interest must be paid. construct a table showing the expected value and standard deviation of the equity return for each of the companies.

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You are trying to decide whether to buy stock in company x or company y. both companies need $1,000...
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