P16-4 Profit on Option You have purchased a call option contract on Johnson & Johnson common stock. The option has an exercise price of $57.50 and &J's stock currently trades at $58.93. The option premium is quoted at $2.17 a. Calculate your net profit on the option contract if J & J's stock price rises to $62.50 and you exercise the option. Net Profit = Final Stock value-Purchase Cost-Exercise cost Calculate your net profit on the option contract if falls to $58.00 and you exercise the option b. & 's stock price Net Profit Final Stock value-Purchase Cost-Exercise cost c-1. If the stock price is $58.00, what would be the gain or loss if you exercise or not exercise the option. Exercise: Net Profit (loss) = Final Stock value-Purchase Cost-Exercise cost Not Exercise: Net loss Purchase Cost C-2. Based on your answers above would it be more profitable to exercise the option or not exercise the option? Compare the two answers in part c-1