Question 5 2 pts Suppose ABC Ltd is deciding whether to issue zero-coupon debt with a face value of $89.6 billion and 16 months to maturity (due date of debt would be January 2021). ABC Ltd currently has 320 million shares outstanding, a stock price of $398 per share and no debt. Prior to deciding whether to go ahead with the debt issue, management would like an estimate of what interest rate they would need to pay. To answer this question, you have collected the following information on put and call options written on the company's stock. Call Options Put Options Strike Price ($) Series Jan 2021 Bid (S) Ask ($) Bid ($) Ask ($) Series 264.50 200 Jan 2021 267.20 14.50 16.40 Jan 2021 Jan 2021 186.50 188.80 280 Jan 2021 21.50 23.50 162.80 165.00 300 Jan 2021 25.50 26.70 Using the above information, what rate of interest would ABC LTD need to pay if it went ahead with the debt issue? Assume perfect capital markets. 7% 10% 15% 25% 5% Question 5 2 pts Suppose ABC Ltd is deciding whether to issue zero-coupon debt with a face value of $89.6 billion and 16 months to maturity (due date of debt would be January 2021). ABC Ltd currently has 320 million shares outstanding, a stock price of $398 per share and no debt. Prior to deciding whether to go ahead with the debt issue, management would like an estimate of what interest rate they would need to pay. To answer this question, you have collected the following information on put and call options written on the company's stock. Call Options Put Options Strike Price ($) Series Jan 2021 Bid (S) Ask ($) Bid ($) Ask ($) Series 264.50 200 Jan 2021 267.20 14.50 16.40 Jan 2021 Jan 2021 186.50 188.80 280 Jan 2021 21.50 23.50 162.80 165.00 300 Jan 2021 25.50 26.70 Using the above information, what rate of interest would ABC LTD need to pay if it went ahead with the debt issue? Assume perfect capital markets. 7% 10% 15% 25% 5%