Ballyhoo Inc., was taken private through an LBO transaction many years ago. The company is now carrying a considerable amount of debt in the form of a zero-coupon bond with a face value of $2.5B which needs to be repaid in two years. The estimated market value of the Ballyhoo underlying business is $2.0B, and the volatility of the underlying business is 30.0%. Using a risk-free rate of 1.5%: a. What is the equity worth in this business?
b. What if the value of the debt?
c. What is the debt-to-equity ratio of the firm?
d. What is the yield to maturity of the debt?

Match each definition in column 1 with a vocabulary word from column 2." some of the entries in column 2 do not apply costs which do not change with the level of output costs which change with the level of output the change in total costs resulting from an increase in output by one unit function showing the quantities of a particular good demanded at a range of price when the quantity supplied of a good is greater than the quantity demanded when the quantity demanded for a particular good is greater than the quantity supplied the price and quantity determined in a market when the supply equals the demand when revenue exceeds costs when costs exceeds revenue output where revenue = costs