Already have an account? Get multiple benefits of using own account!
Login in your account..!
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Jared Lazarus has just been named the new chief executive officer of BluBell Fitness Centers, Inc. In addition to an annual salary of $645,000, his three-year contract states that his compensation will include 39,500 at-the-money European call options on the company’s stock that expire in three years. The current stock price is $44 per share, and the standard deviation of the returns on the firm’s stock is 65 percent. The company does not pay a dividend. Treasury bills that mature in three years yield a continuously compounded interest rate of 6 percent. Assume that Mr. Lazarus’s annual salary payments occur at the end of the year and that these cash flows should be discounted at a rate of 11 percent.
Use the Black–Scholes model to calculate the value of the stock options. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Stock options $
Determine the total value of the compensation package on the date the contract is signed?
what is the maximum level of accounts payable the company can have and still meet the current ratio restriction?
Determine the degree of operating leverage for a firm that has the percentage change in sales equal to 35% and the percentage change in operating income is 46%.
Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity and a yield to maturity of 6.7%. What is the duration if the yield to maturity is 10.7%?
Suppose your company imports computer motherboards from Singapore. What is your profit at the current exchange rate? What is the break-even exchange rate?
You purchase 14 call option contracts with strike price of $80 and a premium of $1.80. Assume stock price at expiration is $92.00. What is your dollar profit?
What is the lower boundary for the value of a European vanilla put option on this asset with strike price of $80?
Cooling Tools Inc. is currently producing 1,477 of small refrigerators per month but the company’s CEO plans to increase production at the rate of 11.00 percent per month until the firm is producing 6,476 of refrigerators per month. How many months w..
Assume you are fund manager at large mutual fund, handling retirement savings of your clients. calculated as expected return on the market less risk free rate.
What is total owners’ equity on the accounting balance sheet for Mariposa Brewery Corp.?
We learn in finance that what allows our economy to function properly is "efficiency" in the markets. The use of financial intermediaries allows capital to flow from savers to borrowers. The savers receive interest on their investments and the borrow..
Stock market indices are used for all of the following except: a) to serve as a benchmark for judging performance of asset managers b) to help analyze stock market returns on a global basis c) to help perform technical analysis of the overall market ..
The risk free rate is 7%, the return in the market is 10%, and the beta is 1.30. What return must you receive to be satisfied that you are being fairly compensated for the risk of the firm?
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!
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd