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An option on a stock has the following data: S = $60.36; E = $60; r = 1.75%; T = 18 days; std dev = 0.674 (i.e. 67.4%); market price of call = $3.50.
1. What is the intrinsic value of the call option?2. What is the time value of the call option?3. Using the Black-Scholes model, calculate the hedge ratio, N(d1).4. Using the Black-Scholes model, calculate N(d2).5. Calculate the theoretical (fundamental) price of the call based on the Black-Scholes model
Discuss the objectives of corporate governance and why this has led to increased costs for publicly traded companies.
Determine intrinsic value of the option and option's time premium at this price.
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Delta , LLC, currently net leases its headquarters office building for $70,000 each month, and this lease has two years left to run. Under a commercial fully net lease, the tenant pays for all repairs, maintenance, insurance and property taxes.
The company does its analysis based on a 10-year store life. We believe the business can be sold for $100,000 after taxes (disposal value) at the end of its 10 year lifer. Using an 10% required return, what is the net present value of this venture..
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