Question
Question 8 (1.5 points) You have the following data on a call option: t = 0.85 years; S0 = $ 90; K = $ 90;
Question 8 (1.5 points)
You have the following data on a call option: t = 0.85 years; S0 = $ 90; K = $ 90; r = 5% per year; = 3% per year. (NB: For d1 and d2, round to two digits after the decimal point, to the nearest even number, before using the normal distribution table available on CLIC).
Question 8 options:
$ 3.992378
$ 5.238510
$ 2,770,412
$ 4,115,202
$ 3.729425
Question 9 (0.75 points)
A company has $ 950,000 of perpetual bonds outstanding. Its tax rate is 30%. Calculate the debt tax benefit according to Miller (1977), if investors are taxed 8% on bond income and 5% on equity income.
Question 9 options:
$ 263,315.2174
$ 269,474,637
$ 300,000,000
$ 277,173,913
$ 291,032,608
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