What is the intrinsic value and value of a call option

Assignment Help Financial Management

Reference no: EM131360809

T-bills currently yield 3.9 percent. Stock in Deadwood Manufacturing is currently selling for $76 per share. There is no possibility that the stock will be worth less than $69 per share in one year.

a-1. What is the value of a call option with a $58 exercise price? (Round your answer to 2 decimal places, e.g., 32.16.)

Call option value $

a-2 What is the intrinsic value?

Intrinsic value $

b-1. What is the value of a call option with a $45 exercise price? (Round your answer to 2 decimal places, e.g., 32.16.)

Call option value $

b-2 What is the intrinsic value?

Intrinsic value $

c-1 What is the value of a put option with a $58 exercise price?

Put option value $

c-2 What is the intrinsic value?

Intrinsic value $

Reference no: EM131360809

Questions Cloud

What per visit price must be set for service to break even : Assume that the managers of Kaibab Hospital are setting the price on a new outpatient service. Her are relevant data estimates: What per visit price must be set for the service to break even? To earn an annual profit of $100,000? Repeat part a, but a..

International financing options for the business or project : Explain how a company may break into global enterprise by gaining a new contract, whether the organizational structure and business objective play a part in the company’s entrance to international trade, how transaction and other exposures play a par..

Recorded the single greatest rock song ever made : The Stack has just written and recorded the single greatest rock song ever made. The boys in the band believe that the royalties from this song will pay the band a handsome ?$200,000 every year? (at the end of the? year) forever. What should the reco..

The investment is financed with? debt : Kohwe Corporation plans to borrow $ 47.8$47.8 million to finance a new investment. The firm will pay interest only on this loan each? year, and it will maintain an outstanding balance of $ 47.8$47.8 million on the loan. What is? Kohwe's share pri..

What is the intrinsic value and value of a call option : T-bills currently yield 3.9 percent. Stock in Deadwood Manufacturing is currently selling for $76 per share. There is no possibility that the stock will be worth less than $69 per share in one year. What is the value of a call option with a $58 exerc..

Commits to paying constant dividend : The Targaryen Corporation (TTC) commits to paying a constant dividend of $3 per share each year, in perpetuity. Suppose that another investment with the same level of systematic risk as TTC’s shares has an expected return of 15%. Now assume that all ..

What is the difference to an investor retirement account : Many IRA funds argue that investors should invest at the beginning of the year rather than at the end. What is the difference to an investor's retirement account if she invests $2,200 per year at 10 percent over a 30 year period?

Risk-free rate of return-market risk premium : The risk-free rate of return is 5.4 percent and the market risk premium is 13 percent. What is the expected rate of return on a stock with a beta of 1.6?

Share price just after the dividend is paid : Suppose that all capital gains are taxed at a 20% rate, and that the dividend tax rate is 40%. Winterfell and Sons is currently trading for $25, and is about to pay a $3 special dividend. What is Winterfell and Sons’ share price just after the divide..

User Account

All Pages