Answer and Explanation:
The solution of profit/loss is shown below:-
Stock Price Profit/Loss
a. $32 -$4.30 After 6 months Stock price is less than strike price
b. $37 -$4.30 After 6 months Stock price is less than strike price
c. $42 -$4.30 After 6 months Stock price is equal than strike price
d. $47 $0.7 ($47 - $42 - $4.30)
e. $52 $5.7 ($52 - $42 - $4.30)
Answer: Undercapitalization
Explanation:
Undercapitalization is defined as the situation where a person or entity of any kind does not have sufficient funds or capital to run their business and pay the costs it has. This type of situation usually occurs when the business is not selling the necessary amount of products or services to generate the amount of income necessary to meet all the payments it has.
When an entity or business is undercapitalization, in many cases they have had to take measures such as downsizing, fewer materials to create the product, or ultimately, if none of this works, having to close the business.
You multiply 3 by 120 to get $360 the answer is b. $360
Answer:
$65.37
Explanation:
Calculation for how much are you willing to pay today to purchase one share of the company's stock
Using this formula
P/0 = D0 ( 1 + g ) / R-g
Let plug in the formula
P/0 = $2.60 (1 + .056) / .098 - .056
P/0 = $2.60 (1 .056)/0.042
P/0=$2.7456/0.042
P/0=$65.37
Therefore how much are you willing to pay today to purchase one share of the company's stock will be $65.37
