Strike price as well as draw the payoff graph

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The 3 business conglomerates in Malaysia, Genting Group of Companies, Berjaya Group of Companies and Kuok Group of Companies have all applied for the licence to operate a 24-hour television network in the country. Based upon government policy, only 1 licence will be given. Getting the licence to operate a 24-hour TV network will definitely boost the revenue of these conglomerates drastically through advertising fees, etc. Assume Kuok Group of Companies is one of these potential conglomerates to receive the licence and they have stock options available. Explain a suitable option trading strategy for this conglomerate. Estimate the cost of the option(s), expiry and strike price as well as draw the payoff graph.

Reference no: EM132594507

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