A company has a single zero coupon bond outstanding that matures in five years with a face value of $45 million. The current value of the company’s assets is $31 million, and the standard deviation of the return on the firm’s assets is 41 percent per year. The risk-free rate is 5 percent per year, compounded continuously. a. What is the current market value of the company’s equity?

the answer is either c or b, i cant be to sure tho.

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.