,Solve for me this

Mr and Mrs Jones both wish to buy stocks in Widgets Inc. They don't have enough money right now, so they are considering buying either forwards or options on the stocks, both with a term of 4 years. The stock price at time 0 is $10 with standard deviation of 12% per annum. The stock does not pay any dividend. The continuously compounded risk-free rate of interest is 5% per annum. (1) Calculate the 4 year forward price on one stock. [1] (ii) Calculate the price at time 0 of a 4 year call option on one stock with a strike price of 12.21. [3] Mrs Jones enters into one forward contract, while Mr Jones buys one call option. At time 4 the stock is worth $12. (iii) Calculate the accumulated profit or loss at time 4 for Mrs Jones. [1] (iv) Calculate the accumulated profit or loss at time 4 for Mr Jones. [2] (v) Explain why Mr Jones makes a loss despite having an option that does not force him to buy the stock. [2] (vi) Calculate the range of stock prices at time 4 which would leave Mr Jones better off than Mrs Jones. [3]3. Wolfson Inc. is considering to lease a new computer sever that costs 1,800. The machine will be depreciated on a five-year MACRS schedule and will be worth nothing at the end of six yea rs. Assume that the administrative costs are 150 per year paid by the leasing company from Year 0 to 6. The leasing payments are also made in advance for six years. The corporate tax rate is 35 percent and the cost of capital is 12 percent. Depreciation Tax Shield based on Modified Accelerated Cost Recovery System (MACRS) 1) How much should be the minimum lease amount to break-even? (12 marks) 2) Explain the main differences between operating leases and financial leases. (4 marks) 3) Explain the main differences between direct leases and leveraged leases. (3 marks) 4) What is sale and lease-back and briefly explain the advantages of sale and lease-back. (3 marks) 5) Describe the main features of big-ticket leases. (3 marks) 4. The financial manager of Firm BLACK is considering the possible purchase of Firm WHITE. The market value of Firm BLACK is 5,520m (2m shares traded on the stock exchange) before merger, while Firm White's market value is 560m (1.2m shares traded on the stock exchange) before merger. The manager would like to pay 840m to take over the Firm WHITE and expects that the market value ofthe combined firm would be worth 6,750m. 1) Suppose that Firm WHITE is bought for cash, calculate the cost and NPV of the merger from Firm BLACK's viewpoint. (3 marks) 2) If this merger is financed by stock, how many new shares Firm BLACK should issue and what is the exchange ratio? Calculate the share price of the merged firm? (6 marks) 3) Briefly outline three basic styles of merger. (4 marks) 4) Outline the major items when calculating the earnings dilution. {4 marks) 5) Briefly present the process to value a merger. (4 marks) 6) Discuss a tactic used in defending an unfriendly merger proposal. (4 marks)