Concept 21.6-2 Option on assets of the firm
Fundamentals of Corporate Finance
Berk, DeMarzo, and Harford
05th Edition
A share of stock is a ______ option written on the assets of the firm with the strike equal to ___.
A share of stock is a ______ option written on the assets of the firm with the strike equal to ___.
Debt holders of a corporation can be thought of as owning the firm but having ___ a call option on the assets of the firm with the strike equal to ___.
Equity holders have the incentive to ___ the volatility of the firm, which is a cost to ___.
Identify the false statement regarding options.