European put option on stock

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Reference no: EM131619536

1. A European put option on a stock with 50 days until expiration has an exercise price of $80. The underlying stock is trading at $65 and the risk-free rate is 4%.

The theoretical maximum price for this option is closest to:

A $15.00.

B $79.57.

C $80.00.

D infinity.

2. The weighted average cost of capital (WACC) is:

the required rate of return for all of a firm's capital investment projects.

the required rate of return for a firm's average risk projects.

not applicable for use by MNE.

equal to 13%.

Reference no: EM131619536

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