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What is your break-even point

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Reference no: EM133233520

(a) Is there an ideal debt to equity ratio for a company? Outline 2 factors that influence the debt to equity ratio for a company in practice.

(b) You were concerned about the price of ABC Ltd shares rising before you had the opportunity to add them to your portfolio. You purchased a call option for ABC Ltd shares with an exercise price of $15 and a premium of $1.80.

(I) Would you exercise the option if the current market price is $22 and why?

(II) What is your break-even point?

(III) What is the option seller's break-even point?

Reference no: EM133233520

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