Selling call option and buying put option

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Reference no: EM132069311

1. Explain carefully the difference between selling a call option and buying a put option.

2. In order to evaluate the stock of Beltran Inc., an analyst uses the constant growth discounted dividend model. Expected earnings of $12 per share is assumed, as are an earnings retention rate of 70% and an expected rate of return on future investments of 17% per year. If the market capitalization rate is 14% per year, calculate the price for a share of Beltran stock.

Reference no: EM132069311

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