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Delta Importers has a pure discount loan with a face value of $180,000 due in one year. The assets of the firm are currently worth $215,000. The shareholders in this firm basically own a ________ option on the assets of the firm with a strike price of

Respuesta :

Answer: call; $180,000

Explanation:

Delta Importers has a pure discount loan with a face value of $180,000 due in one year. The assets of the firm are currently worth $215,000. The shareholders in this firm basically own a call option on the assets of the firm with a strike price of $180,000.

The equity of the firm is owned by the shareholders and it is identical to when a call option is being held and the strike price will be equal to the face value of $180,000.