What is the value in dollars of buzz lightyear options

Assignment Help Finance Basics

Reference no: EM131951483

Question: Buzz Lightyear, the chief executive officer (CEO) of Closet Toys was granted 10 million options. The stock price at the time of the options grant was $50. Assume that his options are at the money. The risk-free rate is 7% and the options expire in 5 years. The annual standard deviation of CT's stock is 30%.Please show all calculations.

a) What is the value of a call option on one share of CT stock?

b) What is the value in dollars of Buzz Lightyear's options?

c) Do these options grant him the right to go to infinity and beyond?

Reference no: EM131951483

Questions Cloud

Write a one page summary for each given article : Write a one page summary for each given article. Amphibian Population Declines: Evolutionary Considerations by ANDREW R. BLAUSTEIN AND BETSY A. BANCROFT.

Calculate the expected return on stock of gamma : Calculate the expected return on stock of Gamma Inc.: State of the economy Probability of the states Percentage returns Economic recession 17% -4.2%.

What was the achievement of al-Farabi : Minor Essay Assignment - What was the achievement of al-Farabi? Why is he important for the history of Islamic thought

Why both the company and the union choose to start-out : There are several reasons why both the company and the union choose to start-out negotiations with the non-economic topics.

What is the value in dollars of buzz lightyear options : Buzz Lightyear, the chief executive officer (CEO) of Closet Toys was granted 10 million options. The stock price at the time of the options grant was $50.

Find the modified internal rate of return : The caffeine coffee company uses modified internal rate of return. The firm has a cost capital of 11 percent. The project being analyzed is as follows.

What nominal rate should be quoted by the bank : Suppose a true effective annual rate is 22.5%. A bank would like to quote the equivalent nominal rate that would be compounded per month.

At what stock price do you get a margin call : Buying on Margin You buy 540 shares of stock that are priced at $80 a share using the full amount of margin available.

Advise Jenny on her tax consequences : Henry, a tax resident of Australia, was a famous jazz singer who passed away recently. Advise Jenny on her tax consequences

User Account

All Pages