What is the price of the stock at maturity

Assignment Help Business Management
Reference no: EM132803244

The current stock price is $80. The stock pays a dividend of $2 every quarter. The risk-free rate is 4%. Over each of the next three-month periods the stock could go up by 10% (u=1.1) or down by 5% (d=.95). The option expires in six months after the second dividend is paid. What is the price of the stock at maturity if stock goes up in the first period and up in the second period? (Round to 2 decimal places)

Reference no: EM132803244

Questions Cloud

What is the expected required rate of return of stock : If the risk-free rate is 3% and you expect the market return to be 11%, what is the expected required rate of return of this stock?
How would you record these transactions : How would you record these transactions in a Transaction Worksheet or show the effects on the fundamental equation of accounting
What is the most likely estimate of the company sales : When reviewing the company's performance, On the basis of information, what is the most likely estimate of the company's sales (in millions of pesos) for 2002?
Why might total risk be relevant for multinational : Why might total risk be relevant for a multinational corporation?
What is the price of the stock at maturity : What is the price of the stock at maturity if stock goes up in the first period and up in the second period? (Round to 2 decimal places)
Question - Research the case of Ultramares : Question - Research the case of Ultramares - Would the accountant be found liable under the other two theories of accountant's liabilities to third parties
What is the bond capital gain or loss yield : What is the bond's capital gain or loss yield? A 10-year, 12% semiannual coupon bond with a par value of $1,000 may be called in 4years
What is the total value of savings : You purchase a mutual fund with annual total fees of 0.2% per year. Your friend purchases a similar fund with higher fees of 1.2% per year.
What will be the flexible budget of factory overhead : Factory overhead at 80% capacity is 37600 and at 50 percent capacity is 28000. what will be the flexible budget of factory overhead at 85% capacity?

Reviews

Write a Review

Business Management Questions & Answers

  How do integration and scope management combine

How do Integration and Scope Management combine to contribute to better project management?

  Managerial decision making

Managerial Decision Making - Show how bias has blocked your ability to make a rational decision

  Iterative elimination of weakly dominated strategies

(a) Apply the iterative elimination of weakly dominated strategies, clearly showing the steps taken. (b) Does the game have an iterated weakly dominant strategy equilibrium?

  Introduction of the new products

KPIs you would recommend to measure organisational performance and what is the purpose of each KPI.

  Explain the different methods of training employees

1. Explain the different methods of training employees. 2. "Lifelong learning," how Human resource management contributes to it, and what might be a next step in learning.

  Process to support non performing employees

Outline what documents would have to be developed for the organization to evidence that it has implemented a process to support non-performing employees?

  Organizational structure and employee separations

Demand forecasting is influenced by both internal factors and external factors: external factors include competition, economic climate, laws and regulatory bodies, changes in technology and social factors whereas internal factors are budget constr..

  Overarching theoretical perspectives about management

What are the two overarching theoretical perspectives about management. What are the three viewpoints that each one covers.

  What does just cause for discipline mean to you

What does just cause for discipline mean to you? In your opinion, are the Seven Tests of Just Cause a valid method of analysis? Why or why not?

  How do conflict negotiation style impact decisions

What type of decisions can on be forced to make in the midst of the conflict?

  Perspectives on specific international marketing issues

To add new perspectives on specific international marketing issues, each student will be required to find a "related topic" and give one 15-minute (approximate) discussion in class. Students need to submit a copy of the slides.

  Rate of inflation between the two years

If a price index is 55 in 1998 and 70 in? 1999, the rate of inflation between the two years is _percent. ?(Enter your response rounded to one decimal? place.)

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