When we can use Monte Carlo numerical method
When we can use Monte Carlo numerical method?
Expert
Monte Carlo is great for complicated path dependency and high dimensionality and for problems that cannot simply be written in differential equation form.
Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years ago at a coupon rate of 11%. They had 20-year terms and $1,000 face values. They are now selling to yield 9%. The tax rate is 37% Preferred stock: Two thousand shares of preferred are outstanding,
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