Some help and explanation will be great

Question 6 12 points Save Answer (12 points) Morgan Stanley has just announced that it is providing 1.5 billion new stock options to its employees. Each option has an exercise price of $24. Immediately prior to this announcement, Morgan Stanley's stock price was $26 per share, with 8.5 billion shares outstanding. Assume that this stock price of $26 did not reflect any anticipation of the stock option program announcement that is, the stock price of $40 reflected the market's beliefs that Morgan Stanley would not provide these stock options to its employees. You should assume that the stock options are not going to change employees' productivity and that Morgan Stanley's total firm value is also unaffected. The firm has $250 billion in long-term debt. Morgan Stanley has not previously granted any stock options to its employees, and the value of Morgan Stanley's debt is unaffected by the surprise announcement. The assumptions of Black & Scholes and Modigliani & Miller without taxes (perfect capital markets) are satisfied. Be sure to answer all of the parts of the question and clearly label your answer for each part. For example, begin your answer to part A with 'Part A:' A. (4 points) To determine the total value of all 1.5 billion options, what would be the exercise price, X, that you would plug into the Black-Scholes model? B. (4 points) What would be the price, P, that you would plug into the Black-Scholes model? C. (4 points) For this last part of question 8, use the following assumptions: Suppose that employees will in fact respond to the extra compensation by working harder, and that total firm value correspondingly rises by $6 billion. In addition, suppose that the existing debt's market value increases by $2 billion, and that the fair market value of the new options is $4 billion. If market participants use this information, what should be Morgan Stanley's new stock price (per share) after the surprise announcement? Question 6 12 points Save Answer (12 points) Morgan Stanley has just announced that it is providing 1.5 billion new stock options to its employees. Each option has an exercise price of $24. Immediately prior to this announcement, Morgan Stanley's stock price was $26 per share, with 8.5 billion shares outstanding. Assume that this stock price of $26 did not reflect any anticipation of the stock option program announcement that is, the stock price of $40 reflected the market's beliefs that Morgan Stanley would not provide these stock options to its employees. You should assume that the stock options are not going to change employees' productivity and that Morgan Stanley's total firm value is also unaffected. The firm has $250 billion in long-term debt. Morgan Stanley has not previously granted any stock options to its employees, and the value of Morgan Stanley's debt is unaffected by the surprise announcement. The assumptions of Black & Scholes and Modigliani & Miller without taxes (perfect capital markets) are satisfied. Be sure to answer all of the parts of the question and clearly label your answer for each part. For example, begin your answer to part A with 'Part A:' A. (4 points) To determine the total value of all 1.5 billion options, what would be the exercise price, X, that you would plug into the Black-Scholes model? B. (4 points) What would be the price, P, that you would plug into the Black-Scholes model? C. (4 points) For this last part of question 8, use the following assumptions: Suppose that employees will in fact respond to the extra compensation by working harder, and that total firm value correspondingly rises by $6 billion. In addition, suppose that the existing debt's market value increases by $2 billion, and that the fair market value of the new options is $4 billion. If market participants use this information, what should be Morgan Stanley's new stock price (per share) after the surprise announcement