Increase the value of put option

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Reference no: EM131569568

1. An increase in which one of these will decrease the value of a call option and increase the value of a put option?

Stock price

Time to expiration

Stock volatility

Interest rate

Exercise price

2. A firm has a market value equal to its book value. Currently, the firm has excess cash of $300 and other assets of $6,200. Equity is worth $5,000. The firm has 500 shares of stock outstanding and net income of $720. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?

$1.44

$.94

$.86

$1.53

$1.71

Reference no: EM131569568

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