Question
A call option contract on Apple Incs stock gives the buyer of the call the right to purchase 100 shares of Apples stock for the
A call option contract on Apple Incs stock gives the buyer of the call the right to purchase 100 shares of Apples stock for the strike price of $150. This call option is traded on an exchange. How the exchange will adjust the strike price and the number of shares of stocks that one call option contract entitles the buyer of the call to buy if
(a) Apple Inc makes a 2-for-1 split ( 2 points)
(b) Apple Inc declares $10 cash dividend ( 2 points)
(c) Apple Inc pays $10 cash dividend ( 2 points)
(d) Apple Inc pays 10% stock dividend ( 2 points)
(e) Apple Inc makes an secondary offering of its stock. This secondary offering increases the total number of shares by 15% ( 2 points)
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