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Akimi4 [234]
3 years ago
14

A stock is currently priced at $52.50 a share. One year from now, the stock price is expected to be either $54 or $60 a share. T

he risk-free rate of return is 4 percent. What is the value of a 1-year call option with an exercise price of $55
Business
1 answer:
oee [108]3 years ago
7 0

Answer:

Value of 1-Year option=$0.48

Explanation:

First, we have to calculate the present value of share being priced at $54 after one year,which shall be calculated as follow:

Present value of share=54(1+4%)^-1

                                     =$51.92

Now we have to calculate the number of options which will be required to exercise for one share:

Number of options=(60-54)/(5-0)=1.2

Finally, we have to calculate the value of 1-year call options which shall be calculated as follow:

Current price of share=Number of options required for one share*Value of 1-year option+Present value of share

52.50=1.2*value of 1-Year option+51.92

1.2*value of 1-Year option=0.58

Value of 1-Year option=$0.48

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b. Create task forces at different levels of the organization that communicate the benefits of the policy change

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Explanation:

An Interactive leader is a leader who seeks the opinion of his or her followers regarding issues in order to achieve a desired goal.

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Holding a series of town hall meetings to discuss the policy change and listen to employee concerns is also vital as the purpose of the policy change can be discussed and the opinions of other with regards to the change can be known.

Lastly, holding of informal meetings with managers, department heads, and staff employees is also essential so that the information can be passed across to the employees in each department and the workers all work towards achieving a common goal.

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2 years ago
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