Question: Use the option data from July 13, 2009 in the following table to determine the rate Google would have paid if it had issued $128

Use the option data from July 13, 2009 in the following table to determine the rate Google would have paid if it had issued $128 billion in zero-coupon debt due in January 2011. Suppose Google currently had 320 million shares outstanding, implying a market value of $135.1 billion. (Assume perfect capitalmarkets.)

422.27 +787 Vol 2177516 GOOG Ju 13 200913:10ET Open Ask Int Calls Bid 1 Jan 150.0 (OZF AJ) 11 Jan 160.0 (OZF AL 11 Jan 200.0 (OZF AA 11 Jan 250.0 (OZF AU 11 Jan 280.0 (OZF AX 11 Jan 300.0 (OZF AT 11 Jan 320.0 (OZF AD) 11 Jan 340.0 (OZF A 11 Jan 350.0 (OZF AK 11 Jan 360.0 (OZF AM 11 Jan 380.0 (OZF AZ 11 Jan 400.0 IOZF AU 11 Jan 420.0 NOUP AG 11 Jan 450,0 (OUP AV 273.60 276.90 100 264.5026720 82 228.90 23120 172 186.50 188.80 103 62.80 165.00 98 148.20 150.10 408 133.90135.90 63 120.50 122.60 99 14.10 116.10269 10790 110.00 66 95.90 98.00 88 85.10 8700 2577 74.60 76.90 66

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Issuing 128 billion in debt is equivalent to a claim on 400 of Googles assets per share From Table 2... View full answer

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