Wesley Corp. stock is trading for ​$20 per share. Wesley has 24 million shares outstanding and a market​ debt-equity ratio of 0.49. ​Wesley’s debt is​ zero-coupon debt with a​ 5-year maturity and a yield to maturity of 8 %.

a. Describe​ Wesley’s equity as a call option. What is the maturity of the call​ option? What is the market value of the asset underlying this call​ option? What is the strike price of this call​ option?

b. Describe​ Wesley’s debt using a call option.

c. Describe​ Wesley’s debt using a put option.