The price of Cilantro, Inc., stock will be either $60 or $80 at the end of the
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The price of Cilantro, Inc., stock will be either $60 or $80 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 6 percent.
a. Suppose the current price of the company’s stock is $70. What is the value of the call option if the exercise price is $50 per share?
b. Suppose the exercise price is $65 in part (a). What is the value of the call option now?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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