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European call and put options (on a non-dividend paying stock) both have an exercise (strike) price of $118, and an expiration date in 9 months.

European call and put options (on a non-dividend paying stock) both have an exercise (strike) price of

$118, and an expiration date in 9 months. The put sells for $3.46, and the call sells for $13.80. The

current stock price is $123.19. Based on the put-call parity relationship the risk free annual rate

compounded quarterly is

A. 5.821683%

B. 5.950016%

C. 5.994490%

D. 6.130593%

  1. E. none of the above

Assume an M&M world with corporate income taxed at a rate TC = 40%. An all-equity firm has the

cost of capital of 10% and the value of $100 mil. The firm issues debt and uses the entire proceeds from

this sale to repurchase some of its equity. As a result, the firm's WACC drops to 8%. What is the $ value

of the firm's equity after the repurchase?

A. $35.5 mil

B. $42.5 mil

C. $62.5 mil

D. $72.5 mil

  1. E. none of the above are true

3. You have just negotiated a 5 year mortgage on $200,000 amortized over 25 years at a rate of 6%.

What is the monthly mortgage payment?

a) 1279.61

b) 1269.71

c) 1167.71

d) 1180.68

  1. e) None of the above

Help me with a calculations for these questions.

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