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mr_godi [17]
3 years ago
15

A stock is currently selling for $75 per share. You could purchase a call with a strike price of $73 for $4. You could purchase

a put with a strike price of $73 for $2. Calculate the intrinsic value of the call option.
Business
1 answer:
Andrew [12]3 years ago
4 0

Answer:

$2

Explanation:

Th intrinsic value of an option is the difference difference between the current stock price and the strike price. That is,

Intrinsic value = Current stock price - Strike price

For the call option in the question, its intrinsic values can be calculated as follows:

Intrinsic value = $75 - $73 = $2

Therefore, intrinsic value of the call option is $2.

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Newman Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just​ completed, Grips earned ​$
Vlada [557]

Answer:

Explanation:

D0 = $1.88

D1 = 1.88*1.25 = $2.35

D2 = 2.35*1.25 = $2.94

D3 = 2.94*1.25 = $3.67

PV of Dividends:

r = 12%

1/(1.12)  = 0.89

PV of D1 = 2.35/0.89 = $2.64

PV of D2 = 2.94/0.797 = $3.69

PV of D3 = 3.67/0.71 = $5.17

Total PV = $11.5

Value after year 3:

(D3*Growth rate)/(Required rate - growth rate) = $3.67*1.06/(0.12-0.06) = $64.8

Pv of 64.8 is 64.8/(1.12)^3 = $46.3

So, the maximum price per share is 11.5+46.3 = $57.8

6 0
3 years ago
What is happening with Unemployment of Indonesia over the past 2 or 3 years?
vampirchik [111]

Answer:

The unemployment rate in Indonesia increased to 6.26 percent in the first quarter 2021 from 4.94 percent in the same quarter a year earlier, amid the economic downturn caused by the coronavirus crisis. The number of unemployed persons surged by 1.82 million to 8.75 million. Meanwhile, the number of employed declined by 2.23 million to 131.06 million, mostly in the transportation and warehouse (-0.30 percent) while that in accommodation and food services reported the largest increase (0.34 percent). Meantime, the labor force participation rate declined to 68.08 percent in the first quarter from 69.21 percent in the prior year. 

Explanation:

give 5 star

6 0
3 years ago
When undertaking social initiatives, a company: a. Must take out social responsibility insurance. b. Will always receive long-te
miskamm [114]
The correct answer is 5
4 0
4 years ago
Danny is an associate with Valley Chartered Accounts in New York. Among various other work commitments, Danny has to file the ta
nika2105 [10]

Answer:

E. instrumental support

Explanation:

Instrumental support is generally the assistance or support an individual receives from their colleagues that is tangible.

Sam, Danny's colleague, observing his stressful situation and then volunteered to assist Danny in meeting the deadline is an example of an instrumental support.

7 0
3 years ago
Read 2 more answers
You will receive annual payments of $800 at the end of each year for 12 years. The first payment will be received in Year 3. Wha
Aneli [31]

Answer:

Option (d) $5,549.96

Explanation:

Data provided in the question:

Annual payments = $800

Time, n = 12 years

Discount rate, r = 7% = 0.07

Now,

PV2 = Annual payments × ((1 - (1 + r)⁻ⁿ)) ÷ r ) × (1 + r)

=  $800 × ( (1 - ( 1 + 0.07)¹²)) ÷ 0.07) × (1 + 0.07)

PV2 = $6,354.15

Therefore,

Present value today = PV2 ÷ (1 + r )²

= $6,354.15 ÷ (1 + .07)²

or

= $5,549.96

Hence,

Option (d) $5,549.96

3 0
3 years ago
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