Question
The CEO of NuValue was granted 1,000,000 options. The stock price at the time of the granting of the options was $45 and the options
The CEO of NuValue was granted 1,000,000 options. The stock price at the time of the granting of the options was $45 and the options are at the money. The risk-free rate was 5% and the options expire in 5 years. The variance on the stock is.04. What is the value of the options contract? If he had negotiated a larger salary and only 10,000 options, what would be the value of the options contract?
Step by Step Solution
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Step: 1
To calculate the value of the options contract you can use the BlackScholes option pricing model The ...
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Chemical Principles
Authors: Steven S. Zumdahl, Donald J. DeCoste
7th edition
9781133109235, 1111580650, 978-1111580650
