A variation on question 4: Suppose the land is occupied by a warehouse generating rents of $150,000
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A variation on question 4: Suppose the land is occupied by a warehouse generating rents of $150,000 after real estate taxes and all other out-of-pocket costs. The value of the land plus warehouse is again $1.7 million. Other facts are as in question 4. You have a European call option. What is it worth?
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The asset value from Practice Question 4 is now reduced by the present valu...View the full answer
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Related Book For
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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