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Distance-to-default of the borrower

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BBB Ltd. is applying for a $10 million loan from the bank. The historical financial data for BBB Ltd is shown in Table 1 below. BBB Ltd.'s shares are trading at $200 per share with an outstanding amount of 1,000,000. Assume that the future market value of assets is $1127 million and its standard deviation in absolute value is 556 million. Current Liabilities 345 million Long Term Liabilities 115 million

What's the Distance-to-Default of the borrower?

Reference no: EM133059688

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