Wesley Corp stock is trading for $25 share Wesley has 20 million shares outstanding and a market debt equity ratio of 0 5 Wesleys debt is zero coupon debt with a 5 year maturity and a yield to maturity of 10 a Describe Wesleys equity as a call option What is the maturity of the call option What is ...

a Maturity 5 years Assets E D 25 20 525 20 500 250 750 ...

Wesley Corp. stock is trading for $25/share. Wesley has 20 million shares outstanding and a market debt-equity

Question:

Wesley Corp. stock is trading for $25/share. Wesley has 20 million shares outstanding and a market debt-equity ratio of 0.5. Wesley’s debt is zero-coupon debt with a 5-year and a yield to of 10%.
a. Describe Wesley’s equity as a call option. What is the of the call option? What is the market value of the asset underlying this call option? What is the of this call option?
b. Describe Wesley’s debt using a call option.
c. Describe Wesley’s debt using a put option.

Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...