![](https://cos-cdn.shuashuati.com/pipixue-wap/2020-1230-1107-56/ti_inject-812ce.png)
There are two firms with identical assets and thus the same EBIT, differing only in their capital structure: Nodett Corp. issuing only stocks, and Somedett Corp. issuing bonds and stocks. Assume that Somedett’s bonds are default free. In a frictionless environment, if Nodett’s market value is greater than that of Somedett, what an arbitrage strategy can you adopt to make money?
A.
Buy the shares of Nodett and sell the shares of Somedett.
B.
Sell the shares of Nodett and buy the shares of Somedett.
C.
Sell 1% of the shares of Nodett, buy 1% of the shares of Somedett and 1% of the bonds of Somedett at their market prices respectively.
D.
Sell short 1% of the shares of Nodett, buy 1% of the shares of Somedett and 1% of the bonds of Somedett at their market prices simultaneously.