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Law Incorporation [45]
3 years ago
13

The exercise price of the options is $100 per share, all options are European, and the stock does not pay any dividend. The call

price is $25 per share and the put price is $17 per share. Both options mature in 2 years. Finally, the annual rate of interest is 5% with continuous compounding. What is the stock price today?
Business
1 answer:
defon3 years ago
3 0

Answer:

Stock Price is $98.70

Explanation:

given data

exercise price = $100 per share

call price = $25 per share

put price = $17 per share

mature time = 2 years

annual rate of interest = 5%

to find out

What is the stock price today

solution

we will use here Put Call Parity for find out Stock Price that is express as

C + \frac{100}{(1+r)^t} = S + P    .....................a

we know here that C is call price and r is rate and t is time and S is Stock Price and P is put price

so put all value in equation a

C + \frac{100}{(1+r)^t} = S + P

25 + \frac{100}{(1+0.5)^2} = S + 17

solve it we get

P = $98.70

so Stock Price is $98.70

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bagirrra123 [75]

<u>Answer:</u>  Personal goals and team fit.

<u>Explanation:</u>

As a student I would not have any experience which I can talk about at the job interview. It is important that I show case my personal goals which are short term and long term career goals. I also need to show that I desire to join the team and have the ability to work as a good team member.

The common skills required to fit into a team such as management skills, leadership skills, communication skills, time management skills, organizing skills etc employers will not understand when I fail to take time to develop these skills.

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3 years ago
True or false: Many companies are discontinuing defined-benefit plans and moving toward defined-contribution plans, which shifts
julsineya [31]

Answer:

False

Explanation:

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Since in the question it is mentioned that the companies would not continue with the defined benefit plan and they move to the defined-contribution plans that save for the retirement so that it would create the more responsibility over the company due to this they would provide the retirement benefit but this statement is false as it is better to received the lumpsum amount

5 0
3 years ago
When the decisions of a company are very risky and low-level managers lack decision-making skills, the company will tend to
Masteriza [31]

Answer: centralization

Explanation:

When the decisions of a company are very risky and low-level managers lack decision-making skills, the company will tend to centralize.

Centralization is simply when an organizational activities especially those that has to do with decision making, planning, framing policies and strategies are all concentrated in a particular location group.

7 0
3 years ago
A buyer values a house at $525,000 and a seller values the same house at $485,000. If sales tax is 8% and is levied on the selle
Katena32 [7]

Answer:

$523,800

Explanation:

Given parameters:

Cost price by buyer = $525000

Selling price by seller = $485000

Sales tax = 8%

Unknown:

The lowest selling price by the seller = ?

Solution:

To solve this business problem, we must understand that the price the seller would be will to part with will be his selling price and the percentage of sales tax incurred in the procurement.

This will be the minimum and least profitable estimated amount the seller is willing to sell at.

   Lowest selling price = selling price by seller + amount of sales tax incurred

Sales tax amount = selling price x sales tax percentage

                             = $485000 x \frac{8}{100}

                              = $38800

Lowest selling price = $485000 + $38800 = $523,800

4 0
3 years ago
A firm has sales of $68,400, costs of $42,900, interest paid of $2,100, and depreciation of $6,500. The tax rate is 34 percent.
tankabanditka [31]

Answer:

9.04

Explanation:

TIE ratio = profit excluding interest/interest

expense

Putting value in above equation;

TIE ratio = 68400-42900-6500/2100

TIE ratio = 9.04

7 0
3 years ago
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