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Many of financial instruments have option characteristics. a) List at least three such financial instruments and discuss how they can be employed to facilitate financing
Many of financial instruments have option characteristics. a) List at least three such financial instruments and discuss how they can be employed to facilitate financing capital. b) One may view even equity as option on firms assets. Explain why equity has option characteristic. Explain also why this option characteristic of equity exacerbate overinvestment problem associated with high leverage.
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