Question
On April 1, 2025, Wilson Corp. purchased a call option on shares of FVA stock. The contract was for 100 shares at a strike price
On April 1, 2025, Wilson Corp. purchased a call option on shares of FVA stock. The contract was for 100 shares at a strike price of $110 per share, with an expiration date of June 30, 2025. The option contract premium was $50. Wilson settled the option on June 15, when a market appraisal estimated the time value of the option to be $30 (assume cash settlement). Prices of FVA stock during the option period are provided below.
| April 1 | June 15 | June 30 | |
| Price of FVA stock: | $110 | $115 | $105 |
Compute the gain or loss on settlement of the option contract.
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The Chief Value Officer Accountants Can Save The Planet
Authors: Mervyn King, Jill Atkins
1st Edition
1783532939, 978-1783532933
