What is the distance to default at time

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Question: The market value of assets at time 0 is 1,000; at time 1 is 1,200. Short-term debt is 500; long-term debt is 300. The annualized asset volatility is 10%. According to the KMV model, what is the distance to default at time 1 (in %)?

Reference no: EM133429430

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