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The renowned financial economists Fischer Black and Myron Scholes noted in their ground breaking paper on option pricing models that the corporation can be said
The renowned financial economists Fischer Black and Myron Scholes noted in their ground breaking paper on option pricing models that the corporation can be said to involve the creditors as owners of the firm, who in effect sell a call option to the shareholders, which may be exercised if the company's assets are sufficient to repay its debts. Is this an accurate explanation of a company's capital structure with both secured debt and equity?
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