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We know that possessing common stocks represents the corresponding ownership of that share of the companys assets. Suppose an investor buys 1% of both the
We know that possessing common stocks represents the corresponding ownership of that share of the companys assets. Suppose an investor buys 1% of both the debt and equity of a levered firm, then her payoff will be
A. | 1% of the company's profits.
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B. | 1% of the company's interests expense.
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C. | 1% of the company's (profits interest expense).
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D. | none of the above |
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