User Account

All Pages

Find the value of the employee stock option

Assignment Help Financial Accounting
Reference no: EM132955071

Question - Company X is going to issue 2,000 stock option (200,000 shares) on its common stock to the top executives today. The exercise price on the stock options is $20 per share. If past experience dictates that the executives will exercise their option by the 10th year on average and that the variance of stock returns is .25 (annual), calculate the value of these stock options assuming a dividend yield of 1% and a risk free rate of 2%. The stock is trading at $15 per share. The company finds that 85% of options are exercised. Find the value of the employee stock option.

Reference no: EM132955071

Questions Cloud

What are three estimates provided by the PERT : What are three estimates provided by the PERT three-estimate approach that give the parameters of this distribution of the duration of an activity
Prepare the company closing entries : Prepare the company's closing entries. Include explanations. Prepare a T-account for Michael Lucas, Capital. What is the ending Capital balance at June
What is the correct adjusted cash balance for this company : Interest on Note Collected by Bank (not recorded by company yet) $30.00. What is the correct adjusted cash balance for this company
Calculate the weighted average cost of capital for mala bhd : Mala Bhd is engaged in home improvement product has been listed at Bursa Malaysia. Calculate the weighted average cost of capital
Find the value of the employee stock option : The stock is trading at $15 per share. The company finds that 85% of options are exercised. Find the value of the employee stock option
Determine perfect paintball ending capital balance at dec : Indicate if the business had a profit or loss for the year. Determine Perfect Paintball's ending Capital balance at December 31, 2020.
Determine the tax liability of Ann Inc : Assume instead that Ann is a C corporation (Ann, Inc.) and that Ann, Inc. has a 15% interest in Rock Corporation. Determine the tax liability of Ann, Inc.
Determine the average rate of return for a project : Determine the average rate of return for a project that is estimated to yield total income of $522,000 over six years, has a cost of $598,600
What was the bay net cost of the inventory : The Bay pays electronically on April 20, 2020, Journalize The Bay's purchase and cash payment transactions. What was The Bay's net cost of this inventory?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Assume straight-line depreciation is used

Fairbanks Company is considering the following investment: Assume straight-line depreciation is used. Ignore income taxes. The net present value of the investment is

  Whats are the treatments

What is the diffefence between Revaluation Decrement and Impairment Loss? What are the effects of Revaluation Model on the financial statements?

  Current australian unemployment and inflation rate

What is monetary policy and what are the objectives of monetary policy for the RBA and market numbers

  What is the depreciation

On January 1, 2019, the entity changed to sum of year's digits method of depreciation. What is the depreciation for 2019

  Prepare an income statement for the year ended

Use the accounts below for Stanley Black and Decker to prepare an income statement for the year ended December 31, 2015. ($ millions)

  What is the amount of the annual dividend paid

50,000 shares of $1 par value common stock outstanding at December 31, 2019. What is the amount of the annual dividend paid to the preferred stockholders?

  What is the yield to maturity

The bonds mature in 11 years and have a $1,000 face value. Currently, the bonds sell for $989. What is the yield to maturity

  What nicholas manufacturing suggests that

Fourth quarter earnings will be 10% higher than last year's fourth quarter. Nicholas had an abnormal return of 1.2% yesterday. This suggests that

  How much is the unadjusted book balance

How much is the unadjusted book balance? Balance per bank statement 10,000. Deposit in transit 4,000. Outstanding check 1,200

  Find what percentage of total assets would lantana show

If Lantana performed a vertical analysis on the Equipment account, what percentage of total assets would Lantana show for the equipment?

  Determine the revenue budget for the hospital

Using the weighted encounters, determine the revenue budget for the hospital using the assumptions that the value per weighted encounter is $100

  Compute the monthly payment and estimate remaining balance

Compute the monthly payment and estimate the remaining balance. Assume interest is on the unpaid balance. Thirty?-year mortgage for ?$210,000 at 3.42?%

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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