What is the use of the black-scholes model

Reference no: EM131518544

Question: The exercise price on one of Flanagan Company's options is $15, its exercise value is $22, and its time value is $5. What are the option's market value and the price of the stock?

2. Use the Black-Scholes model to find the price for a call option with the following inputs:

(1) current stock price is $30,

(2) exercise price is $35,

(3) time to expiration is 4 months,

(4) annualized risk-free rate is 5%, and

(5) variance of stock return is 0.25.

Reference no: EM131518544

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