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Svetllana [295]
3 years ago
9

If you consider the equity of a firm to be an option on the firm’s assets then the act of paying off debt is comparable to _____

on the assets of the firm.a.purchasing a put optionb.purchasing a call optionc.exercising an in-the-money put optiond.exercising an in-the-money call optione.selling a call option
Business
1 answer:
snow_tiger [21]3 years ago
3 0

Answer: The correct option is "c.exercising an in-the-money put option".

Explanation: If you consider the equity of a firm to be an option on the firm’s assets then the act of paying off debt is comparable to <u>exercising an in-the-money put option</u> on the assets of the firm.

because he would be paying the debt with the participation in the equity of the company.

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