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Say yes bank stock price is Rs. 6 per share, its volatility is 35%, it has 2.25 lakh crore as the book value of debt.
Say yes bank stock price is Rs. 6 per share, its volatility is 35%, it has 2.25 lakh crore as the book value of debt. The total value of the bank is 1.5 lac crore. In class, you have been taught that all equity shareholders have a call option on the cos assets. Frame this scenario as a call option.
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