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

Assignment Help Financial Management

Reference no: EM131185161

A stock is currently selling for $56 per share. A call option with an exercise price of $60 sells for$6.56 and expires in three months. If the risk-free rate of interest is 2.60%per year, compounded continuously, What is the price of a put option with the same exercise price?

Reference no: EM131185161

Questions Cloud

Calculate the firms net income : Garden Pro Corporation has sales of 4,932,580;income tax of 364,280;selling, general and administration expenses of 299,666;depreciation 367,773;cost of goods sold of 2,985,285;interest expense of 106,942. Calculate the firms net income.

Used time value of money calculations to copare loan terms : What questions would you ask a mortgage lender if you used the Time Value of Money calculations to copare loan terms with what you "expect" to pay (or owe) based on your calculations. If you've never considered a home loan, substitute a car loan or (..

The cost of debt equals the risk-free rate : Assume a firm's debt is risk-free, so that the cost of debt equals the risk-free rate, Rf Define BA as the firm's asset beta- that is, the systematic risk of the firm's assets. Define B E to be the beta of the firm's equity. Use the capital asset pri..

Company has expected unlevered-after-tax cash flow : Your company has an expected unlevered, after-tax cash flow for the next two years of $281,000. Then (from year 3) it will decrease to $278,400, and stay constant forever. The company also has a constant debt of $4 million. The interest rate paid by ..

What is the price of put option with the same exercise price : A stock is currently selling for $56 per share. A call option with an exercise price of $60 sells for$6.56 and expires in three months. If the risk-free rate of interest is 2.60%per year, compounded continuously, What is the price of a put option wit..

What is the value of one warrant : A bond with 20 detachable warrants has just been offered for sale at $1,000. The bond matures in 25 years and has an annual coupon of $48. Each warrant gives the owner the right to purchase two shares of stock in the company at $45 per share. Ordinar..

Average monthly sales and average monthly on order : If the Open to buy for each month is : February: $30,400.00 March: $31,250.00 April: $127,800.00 May: $162,000.00 June: $377,550.00 July: $127,500.00. Using the figures provided you will calculate the following for the XYZ store. Average monthly sale..

What is the tax advantage of merger each year for webster : Tax benefits and price Hahn Textiles has a tax loss carry forward of $800,000. Two firms are interested in acquiring Hahn for the tax loss advantage. Reilly Investment Group has expected earnings before taxes of $200,000 per year for each of the next..

Demonstrate the importance of cost management : You manage an operating budget of approximately $500,000. You have been instructed to cut your budget by 10 percent two months after you had agreed to a barebones budget for the upcoming year. What do you do if you know that the cuts will affect pati..

User Account

All Pages