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Ima Greedy, the CFO of Financial Saving Techniques has been granted options on 200,000 shares. The...

Ima Greedy, the CFO of Financial Saving Techniques has been granted options on 200,000 shares. The stock is currently trading at $23 a share and the options are at the money. The variance of the stock has been about .08 on an annual basis over the last several years. The options mature in 3 years and the risk free rate is 4%.

What is the value of a call option?

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Expert Solution

Value of 1 call option=5.6220

Value of 200000 call option=5.6220*200000=1124408.932

jeff jeffy answered 2 years ago
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