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Planning #3 (similar to): Return on Stoc Question Help Return on Stock Options. Teresa purchased a...
Return on Stock Options. Teresa purchased a call option on a stock for $253. The option allows her to purchase the stock for $43.19 per share if she exercises the option by December 31st. On December 15th, the stock rises to $73.12 per share and Teresa exercises the option. What is Teresa's return? (Hint: Ignore transaction costs.) Teresa's return is____%. (Round to the nearest percent.)
Return on Stock Options. Maryanne paid $401 for a call option on a stock. The option gives her the right to buy the stock for $54.25 per share until March 1st. On February 15th, the stock price rises to $61.29 per share, and Maryanne exercises her option. What is Maryanne's return from this transaction? (Hint: Ignore transaction costs.) Maryanne's return from this transaction is____% (Round to the nearest percent.)
Return on Stock Options. Chris purchased a call option on a stock for $301. The option gives him the right to purchase the stock at $28.66 per share until May 1st. On May 1st, the price of the stock is $26.61 per share. What is Chris' return on the stock option? (Hint: Ignore transaction costs.) Chris' return on the stock option is____%. (Round to the nearest whole percent and include a negative sign when appropriate.)
13. Reducing risks with put options Aa Aa Alison owns 100 shares of RTE Telecom Inc. stock that she bought for $40 per share. Alison bought a put option for all 100 shares of the stock with a strike price of $37 per share, option price of $2 per share, and a three-month term. Alison probably bought the option because she What did Alison pay to buy the option? $| sees a bright future for the company and its stock...
An investor purchased a call optuon that allows her to putchase 100 shares of Dell Computer common stick for $45 per share any time during the next six months. The price she paid for the options was $2.50 or $250 total and the current matjet price of Dells stock is $42.50. if the price of Dell increases to $50 and the investor decides to exercise it whst will be the gain or loss that resukts from the option position that...
P21-11 (similar to) Question Help Roslin Robotics stock has a volatility of 26% and a current stock price of $49 per share. Roslin pays no dividends. The risk-free interest is 5%. Determine the Black-Scholes value of a one-year, at-the-money call option on Roslin stock. The Black-Scholes value of a one-year, at-the-money call option on Roslin stock is $. (Round to the nearest cent.)
Part 3: GAAP for Stock Options VU Enterprises Corp, grants its CEO 10,000 stock options on January 1, 2018. Each option has an exercise price of $50 per share, which is also the market price of the stock on January 1, 2018. The options vest in four years from the date of the grant and may be exercised within the six years that follow vesting. VU's stock has a par value of $1. 1. Assume that VU uses the Black-Scholes...
P2.13 (similar to) -Question Help * An investor buys 200 shares of stock selling at $90 per share using a margin of 62% The stock pays annual dividends of $2 00 per share A margin loan can be obtained at an annual interest cost of 8.4%. Determine what return on invested capital the investor will realize if the price of the stock increases to $107 within six months. What is the annualized rate of return on this transaction? If the...
Please show calculation P14-21 (similar to) Question Help Yerba Industries is an all-equity firm whose stock has a beta of 0.50 and an expected return of 14%. Suppose it issues new risk-free debt with a 5% yield and repurchase 55% of its stock. Assume perfect capital markets. a. What is the beta of Yerba stock after this transaction? b. What is the expected return of Yerba stock after this transaction? Suppose that prior to this transaction, Yerba expected earnings per...
On January 1, 2018, Adams-Meneke Corporation granted 45 million incentive stock options to division managers, each permitting holders to purchase one share of the company's $1 par common shares within the next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $28 per share. The fair value of the options, estimated by an appropriate option pricing model, is $6 per option. Management's...