Estimate the value of your twtr options

Assignment Help Accounting Basics
Reference no: EM133106737

Question - The common shares of Twitter, Inc. (TWTR) recently traded on the NYSE for $18.70 per share. You have employee stock options to purchase 1,000 TWTR shares for $16.3 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 85.6 percent and that the interest rate is 2.6 percent. (Assume the options are European options that may only be exercised at the maturity date.)

a. Is this option a call or a put?

b. Using an option pricing calculator such as the one at erieri.com/blackscholes, estimate the value of your TWTR options.

c. What is the estimated value of the options if their maturity is six months instead of three years?

d. What is the estimated value of the options if their maturity is three years, but TWTR's volatility is 60.2 percent?

Reference no: EM133106737

Questions Cloud

What is the amount of the estimated loss : What is the amount of the estimated loss (to three decimal places) using a Taguchi quality loss function (QLF) if the actual quality characteristic, x, is 0.510
What is? anle expected capital gain? rate : Question - Anle Corporation has a current price of $11?, is expected to pay a dividend of $1 in one? year, What is? Anle expected capital gain? rate
Compute net sales for the two months ended february : Assuming that Sales Discounts is treated as a contra-revenue, compute net sales for the two months ended February 28
What is the value today of his five-year salary : Marcel has just graduated from college and has found a job that will pay him $30,000 per year at the end of each year, What is the value today of his five-year
Estimate the value of your twtr options : b. Using an option pricing calculator such as the one at erieri.com/blackscholes, estimate the value of your TWTR options
Explain the term period costs : What are the inventoriable costs of a merchandising business? Explain the term period costs
What would be his monthly auto loan payments : Brad is considering a car purchase with his $11700 bonus. What would be his monthly auto loan payments if he were to borrow $28000 over 5 years
Calculate the redemption value of the bond : The bond is priced at 115.85 to yield an annual nominal rate of 6% compounded semi-annually. Calculate the redemption value of the bond
Prepare the cash flows from financing activities : Interest expense for the period was $8,000. The interest payable account increased $2,000. Prepare the cash flows from financing activities

Reviews

Write a Review

Accounting Basics Questions & Answers

  What amount of probable loss from the purchase commitment

On Jan.1, 2019, Siette Corp, signed a three-year, What amount of probable loss from the purchase commitment should Siette report in 2019 income statement?

  Determine the dollar amount of dividends that was paid

No additional shares of preferred stock were issued during fiscal years 2017&2018. Use information to determine the dollar amount of dividends that was paid

  Calculating the predetermined overhead rate applying

calculating the predetermined overhead rate applying overhead to production reconciling overhead at the end of the year

  Discuss activity-based costing system

Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools

  What is the value of the july finished goods inventory

If July 1 inventory was 2,300 units, what is the value of the July 31 finished goods inventory under absorption costing

  Which statements regarding the assessment of going concern

Which statements regarding the assessment of going concern is true? Going concern is a fundamental principle in the preparation of financial statements.

  Determine the amount of the sale

The seller paid the freight of $300. Determine the following: (a) amount of the sale, (b) amount debited to Accounts Receivable

  Apply the theory of constraints

The writing project will be a 2 to 3 page typed paper using the novel "The Goal" as a reference. After reading the book, you will apply the concepts to another situation. You will come up with the situation. In the paper, you will define the origi..

  What would the couple IRA deduction be for the tax year

What would the couple's IRA deduction be for the tax year? What is the amount of their excess SST which they can claim as a credit?

  What is activity method based on hours worked

What is Activity method based on hours worked.Service life 5 years or 10,000 hours Production180,000 units Residual value$ 18,000 In 2016, Gruman uses machine

  Should your company purchase the loader

Your company is looking at purchasing a loader at a cost of $125,000. The loader would have a useful life of seven years.

  Why identification of favorable variance important compa ny

Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd