### Estimate an appropriate option pricing model

Assignment Help Cost Accounting
##### Reference no: EM1376554

On 15th October, 2010, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On 1st January, 2011, 20 million stock options were granted, exercisable for 20 million shares of Ensor's \$1 par common stock. The options are exercisable between 1st January, 2014, and 31st December, 2016, at 80% of the quoted market price on 1st January, 2011, which was \$15. The fair value of the 20 million options, estimated by an appropriate option pricing model, is \$6 per option.

Two million options were forfeited when an executive resigned in 2012. All other options were exercised on 12th July, 2015, when the stock's price jumped unexpectedly to \$19 per share.

#### Questions Cloud

 What is the cost of materials that must be purchased : Find how many umbrellas must the company produce to meet demand and have sufficient ending inventory and evaluate what is the cost of materials that must be purchased? Illustrate what is supermarket as it is used in mrp : Illustrate what is "supermarket" as it is used in MRP. Elucidate how does it alter responsibility for dealing with lead-time offsets. Explain the current trends in union membership : Sippose if you are a director of a corporation, how might you view the bargaining unit? How does the NLRB determine if a bargain unit is appropriate? Determine consumer preference weather related information : Can observation method be used to determine consumer preference for weather related information. If so which observational method would you use also why. Estimate an appropriate option pricing model : Two million options were forfeited when an executive resigned in 2012. All other options were exercised on 12th July, 2015, when the stock's price jumped unexpectedly to \$19 per share. Which optimistic time estimates can be used as crash times : If it were necessary to crash to 250 or 240 days, elucidate how would Hill do so, also at illustrate what costs? As noted in case, assume which optimistic time estimates can be used as crash times. Find recourse after being fired from her job : Joan works for City Building and Records section. She was employed a year before Derrick who works in her section. One day, Derrick complained to her about her jewelry, a small gold cross she wore as a necklace. Difference between direct and indirect materials : Describe the difference between direct and indirect materials. Give examples of each for a manufacturing company of your choice and describe the four levels of production activities and why they are important. Can you imagine an analytical approach : Having been exposed to introductory material about ergonomics, can you imagine an analytical approach to documenting problem reported by drivers.

### Write a Review

#### Cost accounting assignment

Evaluate Method of measuring costs associated with production, budgeting process, normal job-order costing system , master budget, cycle time.

#### Prepare the journal entries

Prepare the journal entries to record the bond issue and interest expense.

#### Advise as to the liability of all the parties

Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.

#### Prepare revenues budget

Prepare Revenues budget and Production budget in units

#### Effect of exchange rate changes on cash and cash

Effect of exchange rate changes on cash and cash

#### Corporate governance

You are to reflect on how this case of China Sky relates to what the arguments for and against allowing audit firm partners and/or employees to join audit committees.

#### Cost-benefit analysis

A cost-benefit analysis of electronic medical records in primary care

#### Non-annual interest rates and annuities

Theory of Interest- Non-annual interest rates and annuities

#### Job costing in service organizations

How is job costing in service organizations different from job costing in manufacturing environments?

#### Accounting and partnership problems

Accounting and Partnership problems

#### Development of relevant cash flows

Development of relevant cash flows - Cost estimating and financial analysis