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If an Investor Buys "A" Proportion of an Both Debt

Question 33

Multiple Choice

If an investor buys "a" proportion of an both debt and equity of a levered firm (firm L)
Then his/her payoff is:

A) (a) * (profits)
B) (a) * (interest)
C) (a) * (profits - interest)
D) none of the above

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