Define target run-up, Define target run-up? What are some

Define target run-up

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Reference no: EM132038434

1. The firm is financed by 40% of debt and 60% of equity. It has the weigthed average cost of capital of 17.4%. The cost of equity is 25% and the firm pays 10% interest rate on its debt to investors. What is the corporate tax rate?

2. Define target run-up? What are some possible reasons for run-up?

3. A call option with a strike price of $30 costs $1.5. A put option with a strike price of $25 costs $2.5. Explain how a strangle can be created from these two options. What is the pattern of profits from the strangle?

4. “Financial time series frequently exhibit time varying unconditional variance.”

Question: Consider whether the statements below are true or false and why (3-4 sentences):

Reference no: EM132038434

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