If You Consider the Equity of a Firm to Be

Multiple Choice

If you consider the equity of a firm to be an option on the firm's assets then the act of paying off debt is comparable to ________ on the assets of the firm.

A) purchasing a put option
B) purchasing a call option
C) exercising an in-the-money put option
D) exercising an in-the-money call option
E) selling a call option