Question
3. You are considering buying a call option for Bernie Bros, a company that is building a series of assisted living homes for aging hippies.
3. You are considering buying a call option for Bernie Bros, a company that is building a series of assisted living homes for aging hippies. Bernie Bros current stock price is $42.20, and the call option you are looking at sells for $5.85 with a $40.00 strike price and six months to expiration.
a. What is the intrinsic value of this option today?
b. What is the premium of this option today?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
11th edition
324422870, 324422873, 978-0324302691
