What Action Would the Holder of a Maturing Call Option

question 18

Multiple Choice

What action would the holder of a maturing call option take with an option which cost $300,had a strike price of $50 and the market value of the stock was $52?

• A)Let the option expire unexercised
• B)Exercise the option
• C)Request that the $300 be returned
• D)None of the above

Identify goods with the least and most deadweight loss due to taxation.

Comprehend the burden distribution of taxes between consumers and producers.

Evaluate tax strategies to minimize inefficiency and deadweight loss.

Recognize the relationship between tax revenue and elasticity of demand and supply.

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Definitions:

Equity Ratios

Equity ratios measure a company's financial leverage and are calculated by dividing total equity by total assets.

Debt-to-Equity Ratios

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Capital Structures

The particular combination of debt and equity used by firms to finance their overall operations and growth.

Recapitalization

The process of restructuring a company's capital structure by exchanging one form of financing for another, such as debt for equity.