Explain why equity can be viewed as a call option on a firm.

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Fundamentals Of Corporate Finance

ISBN: 9780133507676

3rd Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

Question Posted: Oct 25, 2016 11:12 AM

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Explain why equity can be viewed as a call option on a firm.

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Equity can be viewed as a call option on the firm because the payoffs that investors obtai...View the full answer

Fundamentals Of Corporate Finance

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