Callahan Auto Parts Inc. is a profitable automotive parts and accessories manufacturer. The company has 915 shares outstanding, and they are currently trading for $4.55 a share. You are part of a team of analysts covering the automotive industry. Your colleague tells you that at its current price Callahan could present a profitable arbitrage opportunity. Is there an arbitrage opportunity? If so, what profit could you earn exploiting it?

A) *Yes, there is an arbitrage opportunity; $3,892.

B) Yes, there is an arbitrage opportunity; $12,170.

C) Yes, there is an arbitrage opportunity; $8,007.

D) No, there is no arbitrage opportunity.

The answer is A, please show the work.

Callahan Auto Parts Inc. Balance Sheet $3,365 Debt $4,115 $8,055 $12,170 Inventory Assets, $8,805Equity Total $12,170 Total