Question
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%
- 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
- 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
- e) None of the above
Help me with a calculations for these questions.
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