Buckeye Industries has a bond issue with a face value of $1,000 that is coming due...

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Buckeye Industries has a bond issue with a face value of $1,000that is coming due in one year. The value of the company’s assetsis currently $1,140. Urban Meyer, the CEO, believes that the assetsin the company will be worth either $970 or $1,430 in a year. Thegoing rate on one-year T-bills is 6 percent.
a-1.
What is the value of the company’s equity? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
a-2. What is the value of the debt? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

Suppose the company can reconfigure its existing assets in sucha way that the value in a year will be $850 or $1,650.
b.
If the current value of the assets is unchanged, what is the newvalue of the company's equity? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)

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GivenFirms asset 1140Face value 1000T bill rate 6Avalue of equity EOCurrent stock price See Answer

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Buckeye Industries has a bond issue with a face value of $1,000that is coming due in one year. The value of the company’s assetsis currently $1,140. Urban Meyer, the CEO, believes that the assetsin the company will be worth either $970 or $1,430 in a year. Thegoing rate on one-year T-bills is 6 percent.a-1.What is the value of the company’s equity? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)a-2.What is the value of the debt? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.) Suppose the company can reconfigure its existing assets in sucha way that the value in a year will be $850 or $1,650.b.If the current value of the assets is unchanged, what is the newvalue of the company's equity? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)

a-1.	What is the value of the company’s equity? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)
a-2.	What is the value of the debt? (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)