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Zero-Coupon Risky Debt Value in a Firm Is Equal to

Question 8

Multiple Choice

Zero-coupon risky debt value in a firm is equal to


A) Risk free debt plus a call option on the firm's assets.
B) Risk free debt minus a put option on the firm's assets.
C) Equity value minus a call option on the firm's assets.
D) Firm value minus a put option on the firm's assets.

Correct Answer:

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