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

question 20

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%.
-In describing Galt's debt as a put option,the strike price of the put option is:

• A)$200 million.
• B)$300 million.
• C)$500 million.
• D)$700 million.

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Definitions:

Fixed Costs

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.