What is the Black and Scholes value of this option

Assignment Help Financial Accounting
Reference no: EM132743544

Question - A stock trades for $46 per share. A call option on that stock has a strike price of $50 and an expiration date twelve months in the future. The volatility of the stock's returns is 48%, and the risk-free rate is 5%. What is the Black and Scholes value of this option?

Reference no: EM132743544

Questions Cloud

Calculate the deadweight loss from the tax : What price and quantity would prevail after the imposition of the tax? What portion of the tax would be borne by buyers and sellers respectively?
Determine the present value of four : Determine the present value of four €100 end-of-year payments if the first payment is to be received three years from today and the appropriate rate of return i
What is the nominal rate of interest : a) What is the nominal rate of interest? b) What is the periodic rate of interest?
Find what is the total operating income variance for august : Find What is the total operating income variance for August 2019? What is the total flexible-budget variance for the month? What is the sales volume variance
What is the Black and Scholes value of this option : The volatility of the stock's returns is 48%, and the risk-free rate is 5%. What is the Black and Scholes value of this option
Calculate the equivalent annual annuity : Calculate the equivalent annual annuity (EAA) for each project;
How much revenue should Galgadot recognize : Galgadot sold over AUD3,000,000 to Bonhome in the period April 1 to December 31. How much revenue should Galgadot recognize for the first 3 months
How much will retained earnings be overstated : If no correcting entries were made at the end of 20X1, how much will retained earnings be overstated or understated at the end of 20X2?
New-project analysis : The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $850,000

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the average cost per unit produced

Lemon Company spends $3.98 in variable costs for each product produced. Fixed manufacturing overhead costs are $104171 a year. This year, they produced 10,000 units. What is the average cost per unit produced?

  Differences between accounting income and taxable income

Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services commence. Alsup recognizes service revenue for financial reporting purposes when the services are performe..

  What is the amount of cash payments for inventory

Workman-Smith Company's comparative balance sheets included inventory of $120,000 on December 31, 2011, and $110,000 on December 31, 2012. What is the amount of cash payments for inventory that Workman-Smith should report in the operating activities ..

  Processes sugar beets in batches

Coakley Beet Processors, Inc., processes sugar beets in batches. A batch of sugar beets costs $45 to buy from farmers and $19 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. How..

  Taxable income

self-employment tax generally deductible in the computation of taxable income

  The administrator of the orthopedic center

The administrator of the orthopedic center estimated that the center will average 4,400 patient days per month. If the center is to be operated as a nonprofit organization, determine the amount it will need to charge per patient day?

  What the balance in the paid-in capital - treasury stock

What the balance in the paid-in capital - treasury stock account after all five transactions above are recorded would be equal to

  Preparing the bank reconciliation statement

Preparing the bank Reconciliation Statement and Prepare bank reconciliation as of 31 Oct from the following

  How the organization of the company affects accounting

Explain how the organization of the company affects accounting and financial information and subsequent business decisions. Hint: A good place to search.

  What items constitute its balance

Ace company acquires billings company in a combination accounted for as an acquisition and adopts the equity method to account for investment in billings. at the end of 4 years , the investment in billings account on ace's books is $198,000. what ite..

  What is the amount of revenues

Sales taxes $ 25,000 Property taxes 125,000 Income taxes 15,000 Fines 10,000 In accordance with GASB 33, Accounting and Reporting for Nonexchange Transactions, what is the amount of revenues that came from imposed nonexchange transactions?

  What is the quoted price of the bond

The bond has a yield to maturity of 6.7 percent, a par value of $2,000, and matures in 23 years. What is the quoted price of the bond?

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!

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