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Use the following information to answer the question(s) below.
Galt Industries is trading for $20 per share and has 25 million shares outstanding.Galt Industries has a debt-equity ratio of 0.4 and its debt is zero coupon debt with a ten-year maturity and a yield to maturity of 8%.
-In describing Galt's equity as a call option,the maturity of this option is:
Net Present Value
A method used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period of time.
Straight-Line Method
A method of calculating depreciation of an asset by evenly spreading its cost over its useful life.
Net Present Value
A financial measure that determines the variance between the current worth of cash coming in and the current worth of cash going out over a specified timeframe.
Vending Machines
Automated machines that sell products such as snacks, beverages, or tickets to consumers after money, a credit card, or a specially designed card is inserted into the machine.
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