Question 3 (13 marks) Options and Corporate Finance Assume that as of 7 September 2020, Google had no debt and had 600 million shares outstanding which implies a market capitalisation of $954.624 billion. Use the option data from 7 September 2020 in the table below to determine the rate (yield-to-maturity) Google would pay if it issued zero-coupon debt with a face value of $621 billion due in January 2022, and using the proceeds to pay a special dividend. Assume perfect capital markets. Hint: Assume perfect capital markets. That is debt issuance does not affect the total value of the firm. GOOG $1591.04 Calls for 6 January 2022 Strike Last Price 1000 647.20 1010 597.50 1020 1035 560.10 1190 1200 587.50 1230 1250 1280 512.71 396.57 346.40 334.00 333.14 Question 3 (13 marks) Options and Corporate Finance Assume that as of 7 September 2020, Google had no debt and had 600 million shares outstanding which implies a market capitalisation of $954.624 billion. Use the option data from 7 September 2020 in the table below to determine the rate (yield-to-maturity) Google would pay if it issued zero-coupon debt with a face value of $621 billion due in January 2022, and using the proceeds to pay a special dividend. Assume perfect capital markets. Hint: Assume perfect capital markets. That is debt issuance does not affect the total value of the firm. GOOG $1591.04 Calls for 6 January 2022 Strike Last Price 1000 647.20 1010 597.50 1020 1035 560.10 1190 1200 587.50 1230 1250 1280 512.71 396.57 346.40 334.00 333.14