Homework Answers
The EPS is given as follows
for 100% Debt - 0.0021 : 0.049
for 100% Stock - 0.0279 : 0.056
for 50/50 Debt/Stock - 0.0245 : 0.0523
For 100% Stock the EPS is highest 0.0279 : 0.056
So it will be exercised.
Thus, Option #2 100% Stock
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