Bosley Corp. stock is trading for $25/share. Bosley has 20 million shares outstanding and a market debt-equity ratio of 0.5. Bosleys debt is zero coupon debt with a 5-year maturity and a yield to maturity of 10%.

a. Describe Bosleys equity as a call option.

What is the maturity of the call option?

What is the market value of the asset underlying this call option?

What is the strike price of this call option?

b. Describe Bosleys debt using a call option.

c. Describe Bosleys debt using a put option (challenge)