Look once more at the Alphabet call option that we valued in Section 23.2. Suppose (just suppose)

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Look once more at the Alphabet call option that we valued in Section 23.2. Suppose (just suppose) that the interest rate on bank loans is 20%.

a. Recalculate the value of the Alphabet call option.

b. Does the value of a call option increase or decrease if interest rates rise?

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Fundamentals of Corporate Finance

ISBN: 978-1259722615

9th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Jun 24, 2017 09:01 AM

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Look once more at the Alphabet call option that we valued in Section 23.2. Suppose (just suppose)

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a Return to the example in the chapter If the interest rate is 20 then your ...View the full answer

Fundamentals of Corporate Finance

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