Question
A company is created to solely own call options on Apple stock - these would be the firm's only assets. Ignoring taxes, the cost of
A company is created to solely own call options on Apple stock - these would be the firm's only assets. Ignoring taxes, the cost of equity capital for this firm will be:
Higher than the cost of capital for Apple.
Lower than the cost of capital for Apple.
Equal to the cost of equity capital for Apple.
Independent of the cost of equity capital for Apple.
None of the responses A-E are correct.
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Get StartedRecommended Textbook for
Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
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