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4 years ago

If an options contract is exercised, which of the following statements is TRUE?

Business

2 answers:

gayaneshka [121]4 years ago

7 0

I think c because that is what I got

madreJ [45]4 years ago

5 0

Answer:

The seller of a put will be required to buy stock ( C )

Explanation:

An Options contract is a contract between parties usually a buyer and a seller it limits the power of a promisor from revoking an offer made to the buyer. the purchaser of an option can sell or buy an asset at a later date at a specific price the options contract is mostly employed in the purchase of securities real estate transactions and purchase of commodities.

The seller of a put is required to buy a stock because put and stock are inversely related because as the stock price declines below the put strike price the put value will appreciate.

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Holt Enterprises recently paid a dividend, D0, of $3.75. It expects to have nonconstant growth of 23% for 2 years followed by a

liq [111]

Answer:

a. How far away is the horizon date?

IV. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.

b. What is the firm's horizon, or continuing, value? Round your answer to two decimal places. Do not round your intermediate calculations.

to determine the horizon value we can use the Gordon growth formula:

stock price = future dividend / (required rate of return - constant growth rate)

Div₀ = $3.75

Div₁ = $4.6125

Div₂ = $5.673375

Div₃ = $6.97825125

since the terminal value is calculated for year 2, we must use Div₃ in our calculations:

stock price = $6.97825125 / (9% - 6%) = $232.61

c. What is the firm's intrinsic value today, P0? Round your answer to two decimal places. Do not round your intermediate calculations.

we have to calculate the present value of:

P₀ = $4.6125/1.09 + $5.673375/1.09² + $232.608375/1.09² = $4.2317 + $4.7752 + $195.7818 = $204.7887 ≈ $204.79

4 0

4 years ago

Scenario: Economic hardship has befallen the country after a world war in the year 2055. Thankfully, we are victors. However the

Aloiza [94]

Answer:

I RLLY NEED THESE POINTS IM SO SORRY!

Explanation:

8 0

3 years ago

One of the top-selling items at a gift shop at Hilo, HI are autographed pictures of Jack Star. Sales are 18 pictures per week, a

ValentinkaMS [17]

Answer:

a. 54

b. 810 dollars

c. 390 dollars

d. 75 pictures

e. 561.6 dollars and 562.5 dollars

f. 38 pictures

Explanation:

demand per week = 18 pictures

annually this demand = 18 *52 = 936

charge per unit = 60 dollars

order for 6 weeks = 6*18 = 108 quantities

cost of ordering = 45 dollars

cost of holding annually = 15 dollars

a. current average inventory

= (18*6)/2

= 54 pictures

b. current annual holding cost

(108/2)*15

= 810 dollars

c. current annual holding cost

= 936/108 * 45

= 390 dollars

d. size orders to be placed

= $\sqrt{\frac{2*936*45}{15} }$

= $\sqrt{5616}$

= 74.9

≈ 75 pictures have to be ordered

e. ordering holding cost per picture

936/75 * 45

= 561.6 dollars

and inventory holding cost per picture

= 75/2 * 15

=562.5 dollars

f. shop inventory per year at optimal ordering quantity

= 75/2

= 37.5

≈ 38 pictures

4 0

3 years ago

Saira, Inc. has the following income statement (in millions): SAIRA, INC. Income Statement For the Year Ended December 31, 2014

Marizza181 [45]

Answer:

b. 60%

Explanation:

The computation of percentage is assigned to Cost of Goods Sold is shown below:-

$ %

Sales $300 $100

Cost of Goods Sold $180 $60 ($180 ÷ $300) × 100

Gross Profit $120 $40 ($120 ÷ $300) × 100

Operating Expenses $45 $15 ($45 ÷ $300) × 100

Net Income $75 $25 ($75 ÷ $300) × 100

Percentage assigned to cost of goods sold = Cost of goods sold ÷ Sales × 100

= $180 ÷ $300 × 100

= 60%

Therefore for computing the percentage is assigned to Cost of Goods Sold we simply applied the above formula.

3 0

3 years ago

NetonBe makes sweaters, which traditionally involved the following steps: dyeing (i.e., into six different colors), knitting of

ArbitrLikvidat [17]

Answer:

NetonBe

The standard deviation in demand for each of these three generic sweaters is:

a) Approximately 600

Explanation:

a) Data and Calculations:

Different sweater color & size combinations in the end = 18

Normally distributed demand mean of size = 1,000

Total demand of sizes = 18,000

Standard deviation of each size = 100

Standard deviation = 10% of mean (100/1,000 * 100)

Standard deviation for the total sizes = 1,800 (18,000 * 10%)

Average demand of new three sizes = 6,000

Total demand for the three new sizes = 18,000 (6,000 * 3)

Therefore, the standard deviation in demand for each of these three generic sweaters will be = 600 (6,000 * 10%)

5 0

3 years ago