What is the impact of this on the stock price

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Reference no: EM131237593

1. On May 31 a company's stock price is $70. One million shares are outstanding. An executive exercises 100,000 stock options with a strike price of $50. What is the impact of this on the stock price?

2. The notes accompanying a company's financial statements say: ‘‘Our executive stock options last 10 years and vest after 4 years. We valued the options granted this year using the Black-Scholes-Merton model with an expected life of 5 years and a volatility of 20%.'' What does this mean? Discuss the modeling approach used by the company.

Reference no: EM131237593

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