Question
The price of Ervin Corp. stock will either be $66 or $84 at the end of the year. Call options are available with one year
The price of Ervin Corp. stock will either be $66 or $84 at the end of the year. Call options are available with one year until expiration.Continuously compoundedT-bills currently yield 4.84 %. Suppose the current price of Ervin stock is $74.
What is the value of the call option if the strike price is $75 per share?(Round answer to 2 decimal places. Do not round intermediate calculations).
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Fundamentals of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
11th edition
77861701, 978-0077861704
