Every year from now on the EBIT of Accor Industries has a 60% probability of...
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Every year from now on the EBIT of Accor Industries has a 60% probability of being $50 million, or $10 million othen working capital are zero. The current risk-free rate is 5%, and Acort's assets have a cost of capital of 10%. Assume tha $240 million $100 million $340 million $170 million $40 million million otherwise. Assume that the annual depreciation expense of Accor is equal to its capital expenditure, and that annual increases in net %. Assume that there are no taxes. If Acort's market value of debt si $100 million, what is the current market value of its equity
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