Consider again the Netscape PEPS discussed in this chapter and assume the following: the price of Netscape
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Consider again the Netscape PEPS discussed in this chapter and assume the following: the price of Netscape is $39.25, Netscape is not expected to pay dividends, the interest rate is 7%, and the 5-year volatility of Netscape is 40%. What is the theoretical value of the PEPS?
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The main textbook gives the following table of payment at maturity of the Times Mirror PEPS ...View the full answer
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