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What is the value of the? offer

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You own a small networking startup. You have just received an offer to buy your firm from a? large, publicly traded? firm, JCH Systems. Under the terms of the? offer, you will receive 1 million shares of JCH. JCH stock currently trades for $24.44 per share. You can sell the shares of JCH that you will receive in the market at any time. But as part of the? offer, JCH also agrees that at the end of one? year, it will buy the shares back from you for $24.44 per share if you desire. Suppose the current? one-year risk-free rate is 5.89%?, the volatility of JCH stock is 29.9%?, and JCH does not pay dividends.? Round all intermediate values to five decimal places as needed.

A. What is the value of the? offer?

Reference no: EM133056379

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