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Please do buy hand, not using excel. Thank you! A CEO is being granted 1,000,000 at-the-money options. The current stock price is $45, the continuously
Please do buy hand, not using excel. Thank you!
A CEO is being granted 1,000,000 at-the-money options. The current stock price is $45, the continuously compounded risk-free rate is 5 percent, and the variance on the stocks return is .04. The options expire in 5 years. What is the value of the options contract? If the CEO had negotiated a larger salary and only 10,000 options, what would be the value of that options contract?
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