Use the Following Information to Answer the Question(s)below

question 13

Multiple Choice

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%.
-Which of the following best describes Galt's debt using a put option?

• A)Long $200 million in risk-free debt and short a put option on the firm's assets with a $200 million strike price
• B)Short $200 million in risk-free debt and long a put option on the firm's assets with a $200 million strike price
• C)Long $200 million in risk-free debt and short a put option on the firm's assets with a $700 million strike price
• D)Short $200 million in risk-free debt and long a put option on the firm's assets with a $700 million strike price

Analyze the legal ramifications of misrepresentation in contract formation.

Understand the legal requirements and consequences surrounding licensing for professional practice.

Recognize the conditions under which contracts violating state or federal statutes can be deemed invalid.

Learn about the distinction between necessary and non-necessary goods and services for minors.

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Definitions:

Expensive

Describing something that requires a high cost or large amount of money to purchase or obtain.

Revealed Preference Theory

An economic theory proposing that individuals' preferences can be deduced from their purchasing habits and choices, rather than through their words or responses to surveys.

Debit Card

A payment card that deducts money directly from a consumer’s checking account to pay for a purchase.

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good or service.