What is the value of lisas options

Assignment Help Financial Management
Reference no: EM131300772

Lisa Sweet, the CEO of Digital Storage Devices has been granted options on 300,000 shares. The stock is currently trading at $27 a share and the options are at the money. The volatility of the stock has been about .15 on an annual basis over the last several years. The options mature in five years, become exercisable in three years, and the risk free rate is 4%.

What is the value of Lisa’s options?

Reference no: EM131300772

Questions Cloud

Would mark earn on this investment : Mark bought a stock today for $17 per share. Mark's will be able to sell the stock in 10 years for $97 per share. In this case, what interest rate, in percent, would Mark earn on this investment?
Successful ehr implementation story : Talk about successful EHRimplementation story either in United Arab Emirates or any other country you prefer to write about.
Evaluate the risk and reward proposition for an investor : Evaluate the risk and reward proposition for an investor considering purchasing a government versus corporate bond, indicating the key factors to be considered to determine the investor level of risk tolerance and the impact to his decision
Important aspect of being a valuable project manager : An extremely important aspect of being a valuable project manager within an organization is the ability to offer advice to decision makers about whether or not to pursue a project in the first place.
What is the value of lisas options : Lisa Sweet, the CEO of Digital Storage Devices has been granted options on 300,000 shares. The stock is currently trading at $27 a share and the options are at the money. The volatility of the stock has been about .15 on an annual basis over the last..
Discuss the underlying assumptions and implications : Discuss the scope of the resource - what were the main arguments and propositions.Discuss the purpose and philosophical approach.Discuss the underlying assumptions and implications.
Idea of functionalism and its relationship : In reflecting upon the idea of functionalism and its relationship to social stability in society, do you agree with concept of the model? In your discussion, specifically address the idea that because society's needs and individual's needs are sim..
Determine the most significant monetary policy : Determine the most significant monetary policy that the Federal Reserve Bank has been responsible for implementing in the past 12 months and the resulting impact to the U.S. economy
Closures aside from normal project completion : Provide examples of reasons for project closures aside from normal project completion. How do these reasons affect closure processes for a project manager?

Reviews

Write a Review

Financial Management Questions & Answers

  How do you explain rates of return to your cousin

Your cousin Dean is interested in investing $10,000 that he won at the dog track in one of two company’s common stock company A and company B. Data on the most recent Friday weekly prices on the New York Stock Exchange is below. How do you explain ra..

  Describe vernons product life-cycle theory of fdi

Describe Vernon's product life-cycle theory of FDI

  What is the percent value of these cash flows

Huggins Co. has identified an investment project with the following cash flows. If the discount rate is 10 %, what is the percent value of these cash flows? What is the present value at 18 percent? at 24 percent?

  Cash versus stock payment

Penn Corp. is analyzing the possible acquisition of Teller Company. Both firms have no debt. Penn believes the acquisition will increase its total aftertax annual cash flows by $2 million indefinitely. The current market value of Teller is $43 millio..

  What is the problem of free rider

What is the problem of a free rider, and how does it relate to public goods? Provide an example of such a problem, and make a couple suggestions on how to mitigate the free rider issue.

  Weighted average cost of capital assuming no corporate taxes

A firm has an asset base with a market value of $5.3 million. Its debt is worth $2.5 million. If $0.2 million is paid in interest annually and the shareholders expect a 16% annual return, what is the weighted average cost of capital assuming no corpo..

  The statistics budget

The statistics budget:

  What would be your annualized rate of return

Suppose you invest $ 4,030 today to start a business. In 6 years you hope to sell this company for $ 14,849. What would be your annualized rate of return?

  The value of bond investment

The value of bond investment , which provides fixed interest payments, will increase when discounted at 12% rate rather than at a 7% rate True or false please explain

  What will be the winning auction offer? price

Roundtree Software is going public using an auction IPO. The firm has received the following? bids: Assuming Roundtree would like to sell 2.16 million shares in its? IPO, what will be the winning auction offer? price?

  Present value of this cash flow pattern

You have been offered the opportunity to invest in a project that will pay $1,935 per year at the end of years one through three and $13,979 per year at the end of years four and five. If the appropriate discount rate is 20.0 percent per year, what i..

  Eoq a company buys 1 00000 units of material called m every

a company buys 1 00000 units of material called m every month. order costs are rs. 200 per order and carrying costs are

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd