You are attempting to value a call option with an exercise price of $75 and one year to expiration. The underlying stock pays no dividends, its current price is $75, and you believe it has a 50% chance of increasing to $95 and a 50% chance of decreasing to $55. The risk-free rate of interest is 10%. Based upon your assumptions, calculate your estimate of the the call option's value using the two-state stock price model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

50. Falzone Company has two shareholders, Rita and Sal Corporation. Rita acquired her 300 shares in 2003 for $30,000 and Sal Corporation acquired its 200 shares in 1999 for $15,000. On August 2, 2013, Falzone Company sold one of its businesses that it had held since 1999. Due to this sale, Falzone Company redeemed 50 shares from each shareholder in exchange for $20,000 each. Falzone’s E&P at the time of the redemption was $250,000. What are the tax consequences of this transaction to Rita and Sal Corporation?

You are attempting to value a call option with an exercise price of $75 and one year to expiration. The underlying stock pays no dividends, its current price is $75, and you believe it has a 50% chance of increasing to $95 and a 50% chance of decreasing to $55. The risk-free rate of interest is 10%. Based upon your assumptions, calculate your estimate of the the call option's value using the two-state stock price model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)  

Value of the call            $   

1. Rader Tire has the following results for the last six periods. Calculate and compare the betas using each index. Do not round intermediate calculations. Round your answers to three decimal places.

   	RATES OF RETURN
   Period	Rader Tire (%)		Proxy Specific Index (%)		True General Index (%)
   1	29		14		16
   2	13		12		12
   3	-11		-7		-9
   4	18		12		20
   5	20		20		26
   6	-5		-8		0

   β_{using proxy}:

   β_{using true}:

2. If the current period return for the market is 12 percent and for Rader Tire it is 13 percent, are superior results being obtained for either index beta? Do not round intermediate calculations. Round your answers to two decimal places.

   E(R_R)_{using proxy}:   %

   E(R_R)_{using true}:   %

   Rader’s performance would be -Select-inferior compared to eithersuperior compared to eithersuperior compared to true and inferior compared to proxysuperior compared to proxy and inferior compared to trueItem 6 .

1. Sassy has been advised by her financial planner to invest $30,000 today in an ETF Sustainable Fund. If the fund earns 6% annual return with quarterly compounding, to what amount will her investment grow in 10 years?

Group of answer choices

53,725.43

66,241.19

308,571.54

54,420.55

2

Eduardo is planning to invest $10,000 in a mutual fund at the end of each of the next 10 years. If his opportunity cost rate is 7% compounded annually, how much will his investment be worth after the last annuity payment is made?

Group of answer choices

147,835.99

62,889.46

100,000.00

138,164.48

3

Happy purchased a new jeep today for $35,000. It was financed by using a five-year loan with an 8% simple annual interest rate compounded monthly. How much will Happy owe on his vehicle loan after making payments for two years? (Hint: First find the monthly payment).

Group of answer choices

$25,186.08

$22,590.77

$21,946.80

$22,646.97

Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):

Sales $4,100.00

Operating costs excluding depreciation 3,011.00

EBITDA $1,089.00

Depreciation 300.00

EBIT $789.00

Interest 150.00

EBT $639.00

Taxes (40%) 255.60

Net income $383.40

Looking ahead to the following year, the company's CFO has assembled this information:

• Year-end sales are expected to be 6% higher than $4.1 billion in sales generated last year.
• Year-end operating costs, excluding depreciation, will equal 60% of sales.
• Depreciation costs are expected to increase at the same rate as sales.
• Interest costs are expected to remain unchanged.
• The tax rate is expected to remain at 40%.

On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Enter all values as positive numbers. Do not round intermediate calculations. Round your answers to two decimal places.

Limberis Bio has zero-coupon bonds with a current market price of $725.00 with a face value of $1000, that mature in 7 years. What is the annual yield to maturity? Please show your work here. One or two decimal places is sufficient.

A bag contains 3 red marbles, 3 green ones, 1 lavender one, 3 yellows, and 2 orange marbles. HINT [See Example 7.] How many sets of five marbles include at least two red ones?

A put option on a stock expires in 7 months with a strike price of 150. The interest rate is 5 percent and the standard deviation of the stock is 25 percent. Graph the value of this put option as the price of the stock goes from 130 to 170.