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    Fundamentals of Corporate Finance Study Set 9
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    Exam 25: Option Valuation
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    Explain Why the Equity Ownership of a Firm Is Equivalent
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Explain Why the Equity Ownership of a Firm Is Equivalent

Question 23

Question 23

Essay

Explain why the equity ownership of a firm is equivalent to owning a call option on the firm's assets.

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Equity is equal to asset minus liabiliti...

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