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If an Investor Buys a Portion (X)of Both the Debt

Question 5

Multiple Choice

If an investor buys a portion (X) of both the debt and equity of a levered firm, then his/her payoff is

A) (X) × (profits) .
B) (X) × (interest) .
C) (X) × (profits − interest) .
D) None of these options.

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