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10. Applications of option pricing to corporate finance Dada Inc. plans to issue $550 million of bonds in 6 months to build a new plant.

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10. Applications of option pricing to corporate finance Dada Inc. plans to issue $550 million of bonds in 6 months to build a new plant. If interest rates don't rise, the plant will be profitable. Otherwise, it will be unprofitable. Dada has an option similar to a option, which enables it to minimize the risk by taking the following action: Hedge against rising rates by purchasing a put option on Treasury bonds. O Undertake the project anyway because interest rates always fal. O Hedge against rising rates by selling a put option on Treasury bonds. O Hedge against rising rates by purchasing a call option on Treasury bonds. C

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