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You were recently having a family dinner with your uncle who is a Senior Vice-President at one of the companies that produces auto parts. He told you, during the dinner, that he has received an offer to be the CEO of another auto part manufacturing company. He has been told that in addition to his annual salary,
He would be given option to purchase 10,000 shares of the company's stock with strike price of RM90 per share where the option will expire in 2 years. The option will be his signing bonus. Your uncle wants to know the monetary value of this option? You told him that you need to do some analysis and will get back to him about the monetary value of the option.
After a careful study you found the following information:
The last trading price of the stock was RM100 a share. You estimated the annual return volatility of the stock to be 20 percent. The ringgit effective annual risk-free interest rate is 4 percent per annum.
What would be your estimate of the value of the option to buy 10,000 shares?
Travels Sailing, Inc. sells sailing trips at the seashore. Travels has asked for help in calculating its earnings available to common stockholders. The firm generated revenues of $35,000 from its products. The operating costs to produce the products ..
You just won the lottery and want to give some money to a good cause. Because you have enjoyed this class so much, especially the tests, you decide to give $10,000 to HCC to fund student scholarships. HCC is a non-profit educational institution. What..
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Using the CSU Online Library, research the variables that impact the pricing of options. Focus your energy on comparing the attributes of the two widely accepted models used for option pricing:
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Dharma Supply has earnings before interest and taxes (EBIT) of $524000, interest expenses of $325000 abd faces a corporate tax rate of 36 percent. What is Dharma Supply's Net Income? what would dharma net income be if it didn’t have any debt?
Financial Analysts, Inc., is an investment firm that manages stock portfolios for a number of clients. A new client has requested that the firm handle an $800,000 portfolio. As an initial investment strategy, the client would like to restrict the por..
What variable would you concentrate your eff orts on and why? makesure properly cite your work if you are borrowing anything - type of equation works best and which industries this equation would not apply.
Fullerton Company's bonds are currently selling for $1,200.00 per $1000 par-value bond. The bonds have a 10% coupon rate and will mature in 11 years. What is the yield to maturity? (assume semi-annual coupon payments).
How could vendors be encouraged to participate in Wal-Mart China’s sustainability initiatives? What are the distinguishing features of Wal-Mart China’s distribution system? How can Wal-Mart improve sustainability in its distribution and retail operat..
Financial Assessment of MK Robe-Stones Limited Business Plan.
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