What are the break-even stock prices at expiration

Assignment Help Financial Management
Reference no: EM131174934

Generous Dynamics stock currently sells for 73.0 dollars per share. Consider the following portfolio of options on Generous Dynamics stock: -- short one call option with strike price 72.0 and price 7.2615 -- short two put options with a strike price 72.0 and price 5.0125 What are the break-even stock prices at expiration? (At what prices is the profit zero?) 59.726 and 91.536 54.713 and 89.287 63.357 and 89.287 47.452 and 96.548 52.464 and 91.536 

Reference no: EM131174934

Questions Cloud

What appears to be valid or invalid in the article : A discussion of what appears to be valid or invalid in the article - A determination of whether or not you agree with the author's assertion and an explanation as to why you do or do not agree.
What is the firms sustainable growth rate : What is the firm's sustainable growth rate?- If the firm grows at its sustainable growth rate, how much debt will be issued next year?
Company governance structure complete : Question One: Identify a company of your choice. Explain the company's governance structure complete with responsibilities at every level.
Compute the energy loss over a length of 1.80 m : Then, compute the energy loss over a length of 1.80 m. Assume that the surface roughness is similar to that of commercial steel pipe.
What are the break-even stock prices at expiration : Generous Dynamics stock currently sells for 73.0 dollars per share. Consider the following portfolio of options on Generous Dynamics stock: -- short one call option with strike price 72.0 and price 7.2615 -- short two put options with a strike price ..
Projects based on the profitability index : You are considering two mutually exclusive projects. Project A has cash flows of -$74,900, $18,400, $26,300, and $57,100 for years 0 to 3, respectively. Project B has cash flows of -$79,000, $18,400, $22,700, and $51,500 for years 0 to 3, respectivel..
What are the costs and benefits of the policy : What are the costs and benefits of the policy? What are the risks of enacting or not enacting the policy? How will the lives of people who are affected by the health issue change if this policy is enacted?
Program that ask user to enter insurance company name : Write a program that will ask the user to enter the insurance company name, year, the number of insurance policies sold of each car insurance type. The average insurance premiums of each car insurance policy type are $500, $650 and $800
What is the minimum value of this bond : A convertible bond has a 6.5 percent coupon, paid semiannually, and will mature in 10 years. If the bond were not convertible, it would be priced to yield 5.5 percent. The conversion ratio on the bond is 25 and the stock is currently selling for $51 ..

Reviews

Write a Review

Financial Management Questions & Answers

  Expansion project-requires an initial fixed asset investment

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.58 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

  Treasury bills-treasury notes and treasury bonds

Which of the following is correct in regard to distinctions between a U.S. Treasury Bills, Treasury notes and a Treasury bonds?

  What is the firms expected rate of return

Preston Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return?

  What is meant by the time value of money

What is meant by the time value of money, and what are two concepts we are learning about this week that may be relevant to the capital budgeting process?

  What are the effects on cash flow

A project currently generates sales of $12 million, variable costs equal 40% of sales, and fixed costs are $2.4 million. The firm’s tax rate is 40%. Assume all sales and expenses are cash items. What are the effects on cash flow, if sales increase fr..

  Fresh off excitement-investment using straight line method

Fresh off the excitement of the 2012 London Olympic Games, you decide that you want your firm to take advantage of the profits to be made for the 2016 games in Rio de Jeneiro. This $6 million is the after-tax terminal value that is in year 4 (that is..

  What is not a pitfall of the irr rule

What is not a pitfall of the IRR rule? It can be biased against large scaled projects, compared to the NPV rule. Sometime multiple solutions or no solution

  Improved growth in earnings and dividends

Home Place Hotels, Inc., is entering into a 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that time, but when it is complete, it should allow the company to enjoy much improved growth in earn..

  The same time for the same security

A hedge fund company and I entered an order at the same time for the same security. At the same time later that day both of us sold the position. When calculating returns I had a slight gain while the hedge fund had a large loss. How could this be ex..

  What is the economic ordering quantity

Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $2 per order, and carrying costs of $1.60 per unit. Wha..

  What is the price of its common stock

Keystone Corporation has just paid dividends of $2.50 per share, which the company projects will grow at a constant rate of 4% forever. If Keystone shareholders require 12% rate of return, what is the price of its common stock? Show you work

  What is the dear for the trading book of exbank

What is the DEAR for the trading book of ExBank? What graphics and words would you use to explain what DEAR is for the trading book?

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