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

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Definitions:

Distribution Systems

Networks that a company uses to get its products from the manufacturer to the end consumer.

Exporting

A global market-entry strategy in which a company produces products in one country and sells them in another country.

Global Market Entry Strategy

Plans and methodologies developed by businesses to enter international markets, considering factors like market analysis, entry mode, and competitive dynamics.

Political and Regulatory Climate

The current environment and trends in government policies and regulations that affect businesses and markets.