What would be his total pre-tax net profit

Assignment Help Financial Management

Reference no: EM131055247

Company’s current price is 22.5. John believes that Company's stock price is going to increase during the next 10 months. A 10-month call option giving the right to buy 100 shares with a strike price of $56 is available. For each option (to buy each share), the option price or premium is $2.16. If John buys this option, and stock price actually rises to $95, what would be his total pre-tax net profit?

Reference no: EM131055247

Questions Cloud

Strike price and expiration date as for the call option : The current price of a stock is $45, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $60 sells for $7.20. What is the value of a put option, assuming the same strike price and expiration date as for the call option, a..

Based on the binominal model-what is the option value : The current price of a stock is $20, and at the end of one year its price will be either $25 or $15. The annual risk-free rate is 8.0%, based on daily compounding. A 1-year call option on the stock, with an exercise price of $22, is available. Based ..

Describe the major components of the monetary system : Analyze the evolution of the country's monetary system, including the impact of any fiscal monetary and trade policies.

Question regarding the role based access control : You work as the security administrator at TestKing.com. TestKing has a RBAC (Role Based Access Control) compliant system for which you are planning the security implement-tation. There are three types of resources including files, printers, and ma..

What would be his total pre-tax net profit : Company’s current price is 22.5. John believes that Company's stock price is going to increase during the next 10 months. A 10-month call option giving the right to buy 100 shares with a strike price of $56 is available. For each option (to buy each ..

Running cabling for a network : You are running cabling for a network through a boiler room where the furnace and some other heavy machinery reside. You are concerned about interference from these sources. Which of the following types of cabling provides the best protection from..

List modifiable risk factors of coronary artery disease : List four modifiable risk factors of coronary artery disease and explain how each of these factors contribute to the development of plaque

Summarize the project management process groups : You have a team in place for the implementation project. Summarize the Project Management process groups that will be utilized during the project. They should include all of the following:

Necessary for the company to undertake the restructuring : On April 14, 2012, Best Buy Company, Inc., issued a press release from which the following excerpt was taken: April 14, 2012—Best Buy announced plans March 29, 2012, to close 50 U.S. stores as part of a number of key initiatives for this year…. This ..

User Account

All Pages