Question

In: Finance

T-bills currently yield 4.5 percent. Stock in Danotos Manufacturing is currently selling for $82 per share....

T-bills currently yield 4.5 percent. Stock in Danotos Manufacturing is currently selling for $82 per share. There is no possibility that the stock will be worth less than $75 per share in one year.
a-1.

What is the value of a call option with a $69 exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a-2. What is the intrinsic value? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
b-1. What is the value of a call option with a $55 exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b-2. What is the intrinsic value? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
c-1. What is the value of a put option with a $69 exercise price? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
c-2. What is the intrinsic value? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

a-1.Call option value

a-2.Intrinsic value

b-1.Call option value

b-2.Intrinsic value

c-1.Put option value

c-2.Intrinsic value

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

T-bills currently yield 4.3 percent. Stock in Nina Manufacturing is currently selling for $80 per share....
T-bills currently yield 4.3 percent. Stock in Nina Manufacturing is currently selling for $80 per share. There is no possibility that the stock will be worth less than $73 per share in one year a-1. What is the value of a call option with a $64 exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2.What is the intrinsic value? (Do not round intermediate calculations and round your answer to the nearest...
Two State Option Pricing Model T-bills currently yield 3.4 percent. Stock in Danatos Manufacturing is currently...
Two State Option Pricing Model T-bills currently yield 3.4 percent. Stock in Danatos Manufacturing is currently selling for $74 per share. There is no possibility that the stock will be worth less than$71 per share in one year. a) What is the value of a call option with a $70 exercise price? What is the intrinsic value? (b. What is the value of the call option with a $60 exercise price? What is the intrinsic value? (c. What is the...
The stock of Nogro Corporation is currently selling for $20 per share. Earnings per share in...
The stock of Nogro Corporation is currently selling for $20 per share. Earnings per share in the coming year are expected to be $3.00. The company has a policy of paying out 50% of its earnings each year in dividends. The rest is retained and invested in projects that earn an 18% rate of return per year. This situation is expected to continue indefinitely. a. Assuming the current market price of the stock reflects its intrinsic value as computed using...
The stock of Nogro Corporation is currently selling for $15 per share. Earnings per share in...
The stock of Nogro Corporation is currently selling for $15 per share. Earnings per share in the coming year are expected to be $3. The company has a policy of paying out 40% of its earnings each year in dividends. The rest is retained and invested in projects that earn a 20% rate of return per year. This situation is expected to continue indefinitely. a. Assuming the current market price of the stock reflects its intrinsic value as computed using...
A stock is currently selling on the NYSE for $40 per share. Based on the last...
A stock is currently selling on the NYSE for $40 per share. Based on the last twelve months, this represents a P/E ratio of 12.5 and a dividend yield of 4.8%. After an analysis of all the relevant variables, you estimate that the dividends per share will grow at an annual compouind rate of 8% and that GMA will maintain the same payout ratio each year as the previous year. GMA stock is expected to sell at a 15 P/E...
Raphael Corporation’s common stock is currently selling on a stock exchange at $192 per share, and...
Raphael Corporation’s common stock is currently selling on a stock exchange at $192 per share, and its current balance sheet shows the following stockholders’ equity section: Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 70,000 Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding 180,000 Retained earnings 340,000 Total stockholders' equity $ 590,000 Problem 11-5A Part 5 5.1 If two years’ preferred dividends are in arrears and the board of directors declares cash dividends...
Raphael Corporation’s common stock is currently selling on a stock exchange at $180 per share, and...
Raphael Corporation’s common stock is currently selling on a stock exchange at $180 per share, and its current balance sheet shows the following stockholders’ equity section: Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 90,000 Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding 160,000 Retained earnings 380,000 Total stockholders' equity $ 630,000 a.What is the current market value (price) of this corporation’s common stock? b.What are the par values of the corporation’s preferred...
Raphael Corporation’s common stock is currently selling on a stock exchange at $181 per share, and...
Raphael Corporation’s common stock is currently selling on a stock exchange at $181 per share, and its current balance sheet shows the following stockholders’ equity section: Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 75,000 Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding 140,000 Retained earnings 350,000 Total stockholders' equity $ 565,000 Required: 1. What is the current market value (price) of this corporation’s common stock? Raphael Corporation’s common stock is currently selling...
Soltech Company’s common stock is currently selling on a stock exchange at $90 per share, and...
Soltech Company’s common stock is currently selling on a stock exchange at $90 per share, and its current balance sheet shows the following stockholders’ equity section. Preferred stock—8% cumulative, $___ par value, 1,500 shares authorized, issued, and outstanding ................................... $ 375,000 Common stock—$___ par value, 18,000 shares authorized, issued, and outstanding ................................... 900,000 Retained earnings .................................................... 1,125,000 Total stockholders’ equity .............................................. $2,400,000 C2 A4 Required 1. What is the current market value (price) of this corporation’s common stock? 2. What...
Raphael Corporation’s common stock is currently selling on a stock exchange at $180 per share, and...
Raphael Corporation’s common stock is currently selling on a stock exchange at $180 per share, and its current balance sheet shows the following stockholders’ equity section: Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 55,000 Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding 160,000 Retained earnings 340,000 Total stockholders' equity $ 555,000 1. What is the current market value (price) of this corporation’s common stock? Market price per share 2. What are the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT