Find the pseudo-american option value

Assignment Help Financial Management

Reference no: EM132062150

XYZ Corp. will pay a $2 per share dividend in 2 months. Its stock price currently is $64 per share. A call option on XYZ has an exercise price of $58 and 3-month time to expiration. The risk-free interest rate is 0.7% per month, and the stock’s volatility (standard deviation) = 8% per month. Find the pseudo-American option value. (Hint: Try defining one “period” as a month, rather than as a year.) (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Pseudo-American option value $

Reference no: EM132062150

Questions Cloud

Considering straight-line depreciation method : Considering a straight-line depreciation method and compute the depreciation allowance and book value for the 4th year of this project.

Define methods for measuring the effectiveness of solutions : For each of the risks, provide key suggestions for mitigating or eliminating those risks from an auditor's perspective. Suggest key methods for measuring.

Replacement of old petroleum refining machine : ABC Gas industries is considering a replacement of an old petroleum refining machine (model 16) acquired 4 years ago with costs of:

Summarize the coso risk management framework : Summarize the COSO Risk Management Framework and COSO's ERM process. Recommend to management the approach that they need to take to implement an effective.

Find the pseudo-american option value : The risk-free interest rate is 0.7% per month, and the stock’s volatility (standard deviation) = 8% per month. Find the pseudo-American option value.

What is the bond promised yield to maturity : What is the bond’s promised yield to maturity? What is the formula ( Hint look in chapter 5) for the present value of a perpetuity?

Prepare a program that utilizes your computer class : Prepare a program that utilizes your Computer class. The requirements for the program include prompting the user for input, making a calculation.

The dollar amount of interest paid each period : In a typical loan amortization schedule ,the dollar amount of interest paid each period.

How gender inequality is perpetuated through schooling : How gender inequality is perpetuated through schooling? Any theories that explain explicitly on this issues in sociology?

User Account

All Pages