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You own shares of stock of ABC Company. The company has debt in the form of a pure discount loan which is due half a
You own shares of stock of ABC Company. The company has debt in the form of a pure discount loan which is due half a year from today, and has a face value of $65,000 which is due at maturity. All assets of ABC company are worth $75,000 in today's market. Given this information, you can say that the stockholders of ABC Company basically own a option on ABC Company's assets with an exercise price equal to Multiple Choice put: $75,000 warrant: $75,000 call; $65.000 call: $75,000 put: $65.000
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