Allison's Market is currently valued at $68,400.The firm has a pure discount bond in the amount of $50,000 that is due in 1 year.The risk-free rate is 3.2 percent.What is the minimum value the firm must maintain if the shareholders are to exercise their call option on the firm in 1 year?
A) $50,000.00
B) $48,449.61
C) $51,600.00
D) $66,279.07
E) $70,588.80
Correct Answer:
Verified
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