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What is the option value for purcell industries

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Reference no: EM132944493

Assume that you have been given the following information on Purcell Industries' call options:

Current stock price = $16

Strike price of option = $13

Time to maturity of option = 9 months

Risk-free rate = 7%

Variance of stock return = 0.11d1 = 1.04930

N(d1) = 0.85298

d2 = 0.76207

N(d2) = 0.77699

Problem 1: According to the Black-Scholes option pricing model, what is the option's value? Do not round intermediate calculations. Round your answer to the nearest cent. Use only the values provided in the problem statement for your calculations.

Reference no: EM132944493

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