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1. Peter has been granted options on 50,000 shares. The stock is currently trading at $17 a share and the options are at the money. The volatility of the stock returns averages 16 percent. The options mature in 2 years and the risk-free rate is 3.45 percent. N(d1) is .662055 and N(d2) is .576052. Given this information, what is the value of a call option on one share of this stock?
$2.11
$1.70
$2.21
$1.89
$2.28
2. Under risk neutrality, the expected return on an asset will equal:
the market risk premium.
the risk-free rate of interest.
the market rate of return.
zero.
the asset beta times the market risk premium.
KUC’s policy is to write off any uncollected pledges from prior years campaigns at the completion of the next year’s annual appeal.
Calculate the total dollar-day float for the month, calculate the average dollar-day float, calculate the average collection float in days and calculate the annual cost of float assuming an annual opportunity costs of 6%.
Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 7%. The bid for each share should range between $ ___..
Hilton Hotels Corp. has a convertible bond issue outstanding. Calculate the conversion value of each bond.
How large of an annual deposit must you take in order to endow this basketball scholarship.
What will be the new price per share after the repurchase?
Interest Table: Create a spreadsheet to calculate how much a deposit of $1,000 would be worth if left in a bank for ten years at 6.5 percent annual interest. Show princi- pal and interest for each year as follows:
On the other hand, being too optimistic could be detrimental to prospective investors or creditors. How do you find the right balance?
A project will require an initial investment of 61 million dollars in year 0, and is expected to generate equal yearly cash flows of 38 million dollars for the following 5 years. The company's WACC is 10%. What is the regular payback period?
Pasqually Mineral Water, Inc., will pay a quarterly dividend per share of $1.40 at the end of each of the next 12 quarters. What is the current stock price?
On July 1, 2012, Watson Company received a $20,000 promissory note for services from Jeffs Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2013. Assets decrease and owners' equity decr..
what is the average number of care hours per day that you expect to need for the coming year?
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