What is the price of a put option with same exercise price

Assignment Help Financial Management
Reference no: EM13937219

A call option is currently selling for $5.40. It has a strike price of $80 and seven months to maturity. The current stock price is $82, and the risk-free rate is 2.9 percent. The stock will pay a dividend of $1.45 in two months. What is the price of a put option with the same exercise price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

  Price of a put option     $

Reference no: EM13937219

Questions Cloud

Calculate the time 0 cash flow for this project : Pappy’s Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Pappy’s paid $137,000 for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $592,000 p..
Environmental costs of globalization have altered business : “The economic, social, and environmental costs of globalization have altered business practices.”
What is your total return on this investment : Suppose you are a U.S. investor who is planning to invest $785,000 in Mexico. Your Mexican investment gains 10%. If the exchange rate moves from 12.2 pesos per dollar to 12.5 pesos per dollar over the period, what is your total return on this investm..
What is the unemployment rate : Assume there are 300 million people in the United States, 155 million of which make up the labor force. If 10 million people are unemployed, what is the unemployment rate?
What is the price of a put option with same exercise price : A call option is currently selling for $5.40. It has a strike price of $80 and seven months to maturity. The current stock price is $82, and the risk-free rate is 2.9 percent. The stock will pay a dividend of $1.45 in two months. What is the price of..
What is the role of policy in disaster recovery : What is the general approach to disaster recovery as specified in Schmidt? What is the role of policy in disaster recovery? Compare and contrast shared systems, hot standby systems, and cold standby systems for disaster recovery.
What is the maximum increase in money supply : Assume that the Federal Reserve injects $2 billion into the financial system. If the reserve requirement is 18%, what is the maximum increase in money supply? Why might the maximum increase not be achieved?
Coupon bonds on market-what is the effective annual yield : PK Software has 8.4 percent coupon bonds on the market with 23 years to maturity. The bonds make semiannual payments and currently sell for 110.25 percent of par. What is the effective annual yield?
Calculate the weighted average cost of capital : Based on the information below, calculate the weighted average cost of capital. So the question is asking for the weighted average cost of capital. Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the companys estimated cost of retained earnings

Quantix Corp has shares with a beta of 1.3. The risk free rate is 3% and the expected market return is 9%. Its tax rate is 30%. The company's shares currently trade for $45 a share. What is the company's estimated cost of retained earnings?

  Management plans to issue seven-year zero coupon bonds

Rocking house Corp. Management plans to issue seven-year zero coupon bonds. It has learned that these bonds will sell today at a price of $445.16. Assuming annual coupon payments, what is the yield to maturity on these bonds?

  Entered into a futures contract and bought a call option

You need a barrel of oil next month. You could either buy the oil today and keep it for a month, wait and buy the oil next month when you need it, you could enter into a futures contract to buy oil at the current futures price $81, or you can pay $2 ..

  Equal nominal annual payments

You take out a loan for $16101 that has equal nominal annual payments over the next five years. The real rate of return on the loan is 3.9%, and the annual inflation rate is 2.1%. What will the payments be?

  Determine the bonds face value

Draw a clear completely labeled cash flow diagram of the entire bond transcation using dollar accounts where they are are known and $X to represent the bond's face value.

  More sensitive to interest rates

A thrift has an annual CGAP of -$25 million. A credit union has an annual CGAP of +$5 million. The thrift has total assets of $500 million and net income of $7.5 million and the credit union has total assets of $40 million and net income of $0.7 mill..

  Different types of budgets and techniques

You are a manager in a fictitious company of your choice. Your director has asked you to explain to the department staff the different types of budgets and techniques in order to provide an overall understanding. What are the various kinds of budgets..

  About the risk averse

If you are risk averse, you should choose an asset allocation that is:

  Initial outlay-what is the net present value of the project

A project has an initial outlay of $1,964. It has a single payoff at the end of year 7 of $6,219. What is the net present value (NPV) of the project if the company’s cost of capital is 10.89 percent?

  Detail the provisions of the sarbanes-oxley act

Investigate in detail the provisions of the Sarbanes-Oxley Act of 2002 (SOX) from the Internet, periodicals, or academic journals.  Select one of the provisions of the Act, briefly describe it, and indicate why you think (or do not think) financial s..

  Estimate the accuracy of your calculations

Estimate the accuracy of your calculations and suggest reasons for the inaccuracy. Perform the same calculation for other currencies.

  Other limitations on loan payments in this mortgage

The fully-indexed rate on a 5/1 ARM with a maturity of 30 years is determined by the yield on the one-year LIBOR plus a margin of 250 basis points. If the fully-indexed (composite) rate is currently 6%, what is the current yield on the one-year LIBOR..

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