For Every Positive Net Present Value Project That a Firm

question 56

Multiple Choice

For every positive net present value project that a firm undertakes,the equity in the firm will increase the most if the delta of the call option on the firm's assets is:

• A) equal to one.
• B) between zero and one.
• C) equal to zero.
• D) between zero and minus one.
• E) equal to minus onE.

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