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John and Randy form a company with assets worth $900. They each have four shares of stock. Randy gives Cheri a call option on one
John and Randy form a company with assets worth $900. They each have four shares of stock. Randy gives Cheri a call option on one share of stock. The option has an exercise price of $100 and expires in one year. In one year, the firm's assets are worth $1,000 and Cheri exercises the option. What is the intrinsic value of the option at maturity? A.$0 B.$25 C.$50 D.$150 E.$200
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