What would be a fair distribution of cash to hewish

Reference no: EM132207221

Question - Ryles is the only stockholder of Ryles & Hewish, but Hewish has lent a certain sum of money to the business with the understanding that he will be paid $100,000 after 6 years. The current value of the business is $150,000 and its sigma is estimated to be about 0.4. The risk-free rate is 8%. If the company were to be liquidated today, what would be a fair distribution of cash to Hewish and Ryles?

Reference no: EM132207221

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