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What is the value of mr maxims options

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Reference no: EM13848527

Question:

Walter Maxim the CEO of Digital Storage Devices has been granted options on 300,000 shares. The stock is currently trading at $27 a share and the options are at the money.

The volatility of the stock has been about .15 on an annual basis over the last several years. The options mature in five years, become exercisable in three years, and the risk free rate is 4%. What is the value of Mr. Maxim''s options?

Reference no: EM13848527

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