Answer:
B. The price of the call option will increase by less than $2, but the percentage increase in price will be more than 10%.
Explanation:
Given
Trading price = $20
Exercise price of call option = $20
Call option price = $1.50
Price increment = 10% to $22
It's not be noted that the discounted present value of a price of an option is represented by its expected payoff.
An increment of $2 in stock price attracts an increment of more than $2 in the payoff option.
Having highlighted that, it's also to be noted that the increment in expected payoff will be by an amount less than $2 and same with present value because the possibility is less than 1. So, the price of the option will increase by less than $2.
Moving to the percentage increase;
This will be larger than 10%.
This is because when stock price increases by 10%, the value of the option will increase by more than 10%.
Answer:
- Retire Long Term debt at $0
- Issue Long Term Debt at $6,000
Explanation:
If you elect to both retire the $6,000 in long term debt and also issue long term debt of the same amount, your cash balance would be -$3,000 which is unhealthy.
What you should do therefore, is to retire no long term debt while still issuing the long term debt of $6,000 to pay for the investment in plant improvement. This will leave you with a cash balance of $3,000 which is healthy enough.
Answer:
4 SWOT analysis
Explanation:
Swot means strength weakness opportunity and threat analysis. It's An organization's study to identify its inner strong points, vulnerability, threats and additional prospects in relation to business planning and development.it gives the overall organisational situation report.
? What do you need help with ?
Answer:
The correct answer is option A.
Explanation:
The marginal cost is the cost incurred in the production of an additional unit of output. In other words, it is the change in total cost due to a change in output.
The average total cost is the ratio of total cost and the quantity of output. It measures the average cost incurred in the production of each unit of output.
The average total cost curve is U shaped. The marginal cost curve intersects the average total cost curve at its minimum point. So when the marginal cost is greater than the ATC or average total cost is it implies that ATC is rising.