Suppose you have an option to buy a share of ABC Corp. stock for $100. The option

Question:

Suppose you have an option to buy a share of ABC Corp. stock for $100. The option expires tomorrow, and the current price of ABC Corp. is $95. How much is your option worth?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

See More Books

Question Posted: Jan 24, 2013 06:59 AM

See More Questions

An option to buy a stock is priced at $200. If the stock closes above 30 on May 15, the option will be worth $1000. If it closes below 20, the option will be worth nothing, and if it closes between...
An option to buy a stock is priced at $200. If the stock closes above 30 on May 15, the option will be worth $ 1000. If it closes below 20, the option will be worth nothing, and if it closes between...
Melissa purchased 300 shares of ABC Corp stock for 80,000 on June 15, 2012, On August 12, 2014, she sells her 300 shares for 45,000. On September 1 2014 she purchased 100 shares of ABC Corp for 15...
Starting on January 1, 2024, you put $125 every month into an account with an APR of 4.10%. Your last payment is on December 1, 2032. On January 1 of that year, the balance in the account, rounded to...
What is a heterochronic mutation? How does it affect the phenotypic outcome of an organism? What phenotypic effects would you expect if a heterochronic mutation affected the cell lineage that...
Oasis Company adds all materials at the beginning of its manufacturing process. Production information for selected months of the year follows: Required: 1. Reconcile the number of physical units to...
What are some common market research concerns in hospitality? How do you think these concerns could be addressed with market research?
1. If you were the CEO of US Airways, what would you do to confront the competition from its low-cost competitors? 2. Can US Airways survive by remaining the same carrier it is today? 3. If you were...
Could someone help with this? Thanks! A company reports the following income statement and balance sheet information for the current year: Net income $328,200 Interest expense 57,920 Average total...
A bale of cotton tipped the scales at around 500 pounds was about the size of a large suitcase was the amount of picked cotton each slave was expected to produce weekly was equivalent to about six...
Assuming nothing else changes, what happens to the value of an option as time passes and the expiration date gets closer?
You hold an American option to sell one share of Zyther Co. stock. The option expires tomorrow. The strike price of the option is $50, and the current stock price is $49. What is the value of...
Young Company had credit sales of $140,000 during 2018. The balance in Allowance for Doubtful Accounts is a $1,000 debit balance. Journalize the Bad Debts Expense for December 31 using each of the...
You are the cost accountant of an engineering concern which has three departments - preparation, machining and assembly. The budgeted direct labour hours for the workshops are 8,000, 12,000 and...
What alternative to fostering fun and enjoyment at work do you think might have worked for Zappos?
Using the techniques of dimensional analysis, and assuming that experimentation shows the dimensionless number to be 1, derive the following equation: E v = Job card two The results of an ultrasonic...
Given the historical cost of product Carla Vista is $13, the selling price of product Carla Vista is $15, costs to sell product Carla Vista are $3, the replacement cost for product Carla Vista is...
What causes of outliers in statistics and when I create a boxplot why do I not see the outliers. What steps are to take in creating a boxplot?
Wobilt's Department Store had sales to customers during 1979 as follows: cash sales, $\$ 1,500,000$; sales on account, $\$ 1,200,000$. Past experience indicates that 1 percent of goods will be...
A bar of length = 1 has one fixed and one free end and stiffness function c(x) = 1 - x. Find the displacement when subjected to a unit force. Pay careful attention to the boundary condition at the...
Compared to 2009 net income as reported, if XYZ had used the same expected volatility assumption for its 2009 option grants that it had used in 2008, its 2009 net income would have been: A. lower. B....
An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child's birth. The details of the policy are as follows:...
You have just arranged for a $750,000 mortgage to finance the purchase of a large tract of land. The mortgage has an 8.1 percent APR, and it calls for monthly payments over the next 30 years....
A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $9,000 each, with the first payment occurring today, your child's 12th birthday....
Marie Forleo, a marketing trainer and host of MarieTV, presents the eight tips for genuine networking. Do you agree or disagree with her suggestions? Discuss how this information is useful to you and...
Identify all relevant costs or revenue that are applicable to production- constrained decisions 1. Contributions margin of product 2. Interference with other production 3. Contribution margin per...
Gammaro Compary manufactures wallets from fabric. In 2 0 1 9 , Gammaro made 2 , 1 5 0 , 0 0 0 wallets using 1 , 2 5 0 , 0 0 0 yards of fabric. In 2 0 1 9 , Gammaro has capacity to make 2 , 8 0 0 , 0...

Suppose you have an option to buy a share of ABC Corp. stock for $100. The option

Question:

Step by Step Answer:

If an option to buy a share of ABC Corp stock for 100 is provided It is believe that option is wor...View the full answer

Fundamentals of corporate finance

Related Video

Students also viewed these Corporate Finance questions