Question
A company's stock is currently selling for $72.00 a share but is expected to either decrease to $64.80 or increase to $79.20 a share over
A company's stock is currently selling for $72.00 a share but is expected to either decrease to $64.80 or increase to $79.20 a share over the next year. The risk-free rate is 3 percent. What is the current value of a 1-year call option with an exercise price of $72?
| $4.23 | ||
| $5.29 | ||
| $4.54 | ||
| $5.02 | ||
| $4.73 |
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
