What is the total intrinsic value of these options

Assignment Help Financial Management
Reference no: EM131348769

You own six call option contracts on Swift Water Tours stock with a strike price of $17.50 per share and an option premium of $.35 per share. What is the total intrinsic value of these options today if the stock is currently selling for $16.79 a share?

Reference no: EM131348769

Questions Cloud

The initial fixed asset investment in the project : Which one of the following costs was incurred in the past and cannot be recouped? A project will produce an operating cash flow of $31,200 a year for 7 years. The initial fixed asset investment in the project will be $204,900. What is the net present..
What are the total benefits from project : a. What are the total benefits from each project? b. If a vote were held for each project, what would be the result for each project? Is this socially optimal? c. If these representatives were to logroll (trade votes) to get their preferred policy to..
Explain how regulatory agencies and legal systems : Suppose you decide (like Steve Jobs and Mark Zuckerberg did) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phone..
Common stocks while marvin invested in corporate bonds : Your nephews Ricky and Marvin FiftyCent differ in investment philosophies—Marvin is conservative and Ricky holds a moderate investing outlook. Their father left each of them $100,000 when he died ten years ago, and Ricky invested in common stocks whi..
What is the total intrinsic value of these options : You own six call option contracts on Swift Water Tours stock with a strike price of $17.50 per share and an option premium of $.35 per share. What is the total intrinsic value of these options today if the stock is currently selling for $16.79 a shar..
Optimal level of capital for the firm : a. What is the optimal level of capital for the firm? b. Suppose the corporate tax rate on accounting profits is 40%. The firm can include depreciation at the rate δ per year in its accounting costs, but not its financing costs. What is the optima..
What is john expected utility : a. What is John's expected utility? b. What is the actuarially fair insurance premium for full insurance coverage? c. What would John's expected utility be were he to purchase actuarially fair insurance?
Considering a real estate development project : The Glendale Corp. is considering a real estate development project that will cost $5 million to undertake and is expected to produce annual inflows between $1 million and $4 million for two years. Management feels that if the project turns out reall..
Terms of trade loss for h due to the subsidy : What is the worldwide deadweight loss due to the subsidy? What is the producer surplus after the subsidy? What is the "Terms of Trade" loss for H due to the subsidy?

Reviews

Write a Review

Financial Management Questions & Answers

  What rate can you earn on a one-year risk-free us security

The spot rate for the Japanese yen currently is ¥121 per $1. The one-year forward rate is ¥120 per $1. A risk-free asset in Japan is currently earning 5 percent. If interest rate parity holds, what rate can you earn on a one-year risk-free U.S. secur..

  What drives free cash flow

EXPLAIN What drives free cash flow? How can a company increase FCF?

  What is the operating cash flow

Calculating OCF. Hailey , Inc., has sales of $38,530, costs of $121,750, deprectiation expense of $2,550 , and interest expense of $1,850. If the tax rate is 35 percent what is the operating cash flow , or OCF ?

  What is the highest possible beta estimate for the project

You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in millions of dollars): Years from Now After-Tax CF 0 –30 1–9 15 10 30 The project's beta is 1.9. What is the highest possib..

  Relationship between yield to maturity and bond prices

Which of the following statements about the relationship between yield to maturity and bond prices is false?

  What were the proceeds that majorie received

On November 1, Marjorie’s Clothing Store accepted a $5,200, 81%, 90-day note from Mary Rose in granting her a time extension on her On January 13, Marjorie discounted the note at Seawater Bank, which charged a 10% discount rate. What were the proceed..

  What is the tax effect of distribution to Melodie and MIP

At the beginning of the tax year, Melodie's basis in the MIP LLC was $60,000, including Melodie's $40,000 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $10,000 and inventory (bais of $6,000, fair market va..

  Calculate the payback period for the machine

A machine can be purchased for $10,500 including transportation charges, but installation costs will require $1,500 more. The machine is expected to last four years and produce annual cash revenues of $6,000. Determine the relevant after-tax cash flo..

  Internal rate of return for the expansion project

Your client, Rich Industries, is considering an expansion of their plant facilities to increase their capacity for a new product line. The company has provided the following information for your analysis. Prepare a spreadsheet calculation of the Net ..

  What is the nominal interest per year

George bought a car for $26,500. He made a down-payment of $4,500 and financed the rest on a 5-year term with a monthly payment of $575. What is the interest rate per month for the loan? What is the nominal interest per year?

  Statement regarding bankruptcy costs

statement below regarding bankruptcy costs.

  Constant growth valuation-stock price is expected

Harrison Clothiers' stock currently sells for $35 a share. It just paid a dividend of $1.5 a share (that is, D0 = 1.5). The dividend is expected to grow at a constant rate of 3% a year. What stock price is expected 1 year from now?

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