Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In its 10-Q dated February 4, 2012, LLL, Inc., had outstanding employee stock options representing over 288 million shares of its stock. LLL accountants estimated

In its 10-Q dated February 4, 2012, LLL, Inc., had outstanding employee stock options representing over 288 million shares of its stock. LLL accountants estimated the value of these options using the Black-Scholes-Merton formula and the following assumptions:

S = current stock price = $24.77
K = option strike price = $27.20
r = risk-free interest rate = .055
= stock volatility = .32
T = time to expiration = 3.5 years

What was the estimated value of these employee stock options per share of stock?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Middle Market M And A Handbook For Advisors Investors And Business Owners

Authors: Kenneth H. Marks, Christian W. Blees, Michael R. Nall, Thomas A. Stewart

2nd Edition

1119828104, 978-1119828105

More Books

Students also viewed these Finance questions