The following information refers to a six-month call option

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Valuation - options

The following information refers to a six-month call option on the stock of XYZ, Inc.

  • Price of the underlying stock: $50
  • Strike price of the three-month call: $45
  • Market price of the option: $10

Valuation - zero-coupon bond

A U.S. Government bond with a face amount of $10,000 with 8 years to maturity is yielding 3.5%. What is the current selling price?

Valuation - corporate bond

A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)?

Charlie Company is expected to grow at an annual rate of 6% indefinitely. The return on similar stocks is currently 11%. Charlie's board of directors declared a dividend of $1.85 yesterday. What should a share of Charlie Company sell for?

Valuation - preferred stock

What is the value of a share of preferred stock that pays a $9.50 dividend, assume k is 12%.

Reference no: EM13481148

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