His first duty was the pricing of MicroComp's junk-bonds in the market place. It was obvious that MicroComp was confronting problems related to distressful financial conditions.
It'd be forced into bankruptcy if MicroComp was required to repay its debt immediately. Clearly, MicroComp was in successful default, why did its market capitalization stay at $5 million? Had it not dropped to zero? Pupils will use option theory to answer these questions.
Publication Date: 08/12/2005
This is just an excerpt. This case is about Finance
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