Appropriate option pricing model

Reference no: EM13140830

On October 15, 2010, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2011, 20 million stock options were granted, exercisable for 20 million shares of Ensor's $1 par common stock. The options are exercisable between January 1, 2014, and December 31, 2016, at 81% of the quoted market price on January 1, 2011, which was $16. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $6 per option.

Two million options were forfeited when an executive resigned in 2012. All other options were exercised on July 12, 2015, when the stock's price jumped unexpectedly to $20 per share.

Reference no: EM13140830

Questions Cloud

Elucidate how liability and related accounts appear : Provide the journal entry that Master should make on December 31, 2003 assuming the effective interest method. Elucidate how the bond liability and the related accounts will appear on the Balance Sheet of Master on December 31, 2003.

A unit for a telecommunications system is to be designed : A unit for a telecommunications system is to be designed so as to have a minimum availability of 0.9994. The MTTR (mean time to repair) for the unit is estimated to be 24 hours.

How would operation management be a critical component : how would operation management be a critical component to a company like dell

Demonstrate knowledge : for this assessment may identify a special population group e.g borderline personality disorder, CALD background and demonstrate knowledge and skills essential to assessment and care of these clients at risk of suicide.

Appropriate option pricing model : The options are exercisable between January 1, 2014, and December 31, 2016, at 81% of the quoted market price on January 1, 2011, which was $16. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $6 per ..

Compare and contrast the differences in frequencies : Lung Cancer In the small country of Tracetonia located in the Caribbean, the population is one million people and ten percent of the countries population are smokers.

What is the equilibrium concentration of cl2 : If a reaction mixture initially contains 0.159 M SO2Cl2 , what is the equilibrium concentration of Cl2 at 227 C?

Determining interest deduction : Al and Amy file a joint return for the 2007 tax year. Their adjusted gross income is $80,000. They had net investment income of $9,000. In 2007, they had the following interest expenses:

Why do you think home depot is paying out : Why do you think Home Depot is paying out only about 38 percent to 67 percent of its net income to stockholders in the form of cash dividends?

User Account

All Pages