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Employee Stock Options (LO4, CFA2) In its 10Q dated February 4, 2012, LLL, Inc., had outstanding employee stock options representing over 272 million shares of its stock. LLL accountants estimated the value of these options using the Black-Scholes-Merton formula and the following assumptions:
S 5 current stock price 5 $20.72 K 5 option strike price 5 $23.15 r 5 risk-free interest rate 5 .043. 5 stock volatility 5 .29 T 5 time to expiration 5 3.5 years What was the estimated value of these employee stock options per share of stock? ( Note: LLL pays no dividends.)
Fremont Enterprises has an expected return of 20% and Lal News have an expected return of 19%. If you put 63% of your portfolio in Lal News and 37% in fremont, what is the expected return on your portfolio?
Determinants of Interest Rate for Individual Securities A particular security's default risk premium is 3.50 percent. For all securities, the inflation risk premium is 2.25 percent and the real interest rate is 3.00 percent. The security's liquidity ..
What is the payback period of the F-22 Raptor project? The Lockheed Martin/Boeing F-22 Raptor is a stealth fighter aircraft. It was designed primarily as an air superiority fighter, but it is also capable of ground attack and other roles. What is the..
What is the future value of a 10-year zero-bond priced at a YTM of 10%? How much does the IRS get to keep? - What is the future value of a 10-year annual level-coupon bond.
Calculate the option's exercise value? What is the significance of this value, calculate the non-operating terminal year cash flow and calculate net present value. Should the machine be purchased
ABC Company has a cash cycle of 10.11 days, an operating cycle of 22.16 days, and an average collection period of 7 days. The company reported cost of goods sold of $273,071. What is the company's average balance in Accounts Payable?
The qualifier for a financial advisor would be ________.
Siracha Company has currently has $10,000,000 in equity and $0 in debt. Their earnings before interest and taxes (EBIT) of $1,000,000. Siracha Company is considering a 60% debt ratio, and at this level, could acquire capital at 9% interest. The appli..
Doublewide Dealers has an ROA of 12%, a 6% profit margin, and an ROE of 19%. What is its total assets turnover? Round your answer to two decimal places. What is its equity multiplier?
Demarius owns investment A and 1 share of stock B. The total value of his holdings is 2,172.3 dollars. Investment A is expected to pay annual cash flows to Demarius of 350 dollars per year with the first annual cash flow expected later today and the ..
Martha Stewart and her Investment Counselor were indicted, convicted, and did jail time for insider trading. Go on the Internet and find an article about Martha’s case. Do you think they acted ethically? Do you agree with the conviction? Explain why ..
The Clayton Manufacturing Company is considering an investment in a new automated inventory system for its warehouse that will provide cash savings to the firm over the next five years. The firm’s CFO anticipates additional earnings before interest, ..
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