Answer:
a) $8
b) $4
c) Decrease
Explanation:
Background.
A call option as you probably know, is an agreement to buy an asset on or before a particular day at a price already determined in the agreement.
a) the Intrinsic value of the option is the market price minus the strike price.
Intrinsic Value = Market Price - Strike price
= $43 - $35
= $8 per share.
It is worthy of note that for an option, of the intrinsic value dips into negative figures it is just said to be 0.
b) To calculate the time value, we subtract the intrinsic value from the call premium
= Call Premium - Intrinsic value
= $12 - $8
= $4
c) The call option has 6 months to maturity and the dividends are to come in 3 months. Share prices usually drop after a dividend has been paid so because the call option matures in 6 months, the price of the call option will DECREASE owing to the Expected drop in stock price.
Answer:
The answer is "8.37%".
Explanation:
Equity charges
By DDM.
Debt expenses
Bond1
![Bond \ Price = \sum [ \frac{\text{(Semi Annual Coupon)}}{(1 + \frac{YTM}{2})^k}] + \frac{Par\ value}{(1 + \frac{YTM}{2})^{N \times 2}}](https://tex.z-dn.net/?f=Bond%20%5C%20Price%20%3D%20%5Csum%20%20%5B%20%5Cfrac%7B%5Ctext%7B%28Semi%20Annual%20Coupon%29%7D%7D%7B%281%20%2B%20%5Cfrac%7BYTM%7D%7B2%7D%29%5Ek%7D%5D%20%20%20%20%20%2B%20%20%20%5Cfrac%7BPar%5C%20%20value%7D%7B%281%20%2B%20%5Cfrac%7BYTM%7D%7B2%7D%29%5E%7BN%20%5Ctimes%202%7D%7D)
![k=1\\\\K =20 \times 2\\\\980 = \sum [ \frac {(5.1 \times \frac{1000}{200})}{(1 + \frac{YTM}{200})^k}] + \frac{1000}{(1 + \frac{YTM}{200})}^{20 \times 2}\\\\k=1\\\\\ YTM1 = 5.2628923903\\\\Bond2\\](https://tex.z-dn.net/?f=k%3D1%5C%5C%5C%5CK%20%3D20%20%5Ctimes%202%5C%5C%5C%5C980%20%3D%20%5Csum%20%20%5B%20%5Cfrac%20%7B%285.1%20%5Ctimes%20%5Cfrac%7B1000%7D%7B200%7D%29%7D%7B%281%20%2B%20%5Cfrac%7BYTM%7D%7B200%7D%29%5Ek%7D%5D%20%2B%20%20%20%5Cfrac%7B1000%7D%7B%281%20%2B%20%5Cfrac%7BYTM%7D%7B200%7D%29%7D%5E%7B20%20%5Ctimes%202%7D%5C%5C%5C%5Ck%3D1%5C%5C%5C%5C%5C%20YTM1%20%3D%205.2628923903%5C%5C%5C%5CBond2%5C%5C)
![1080 =\sum [\frac{(5.6 \times \frac{1000}{200})}{(1 + \frac{YTM}{200})^k}] +\frac{1000}{(1 +\frac{YTM}{200})^{12 \times 2}} \\\\k=1\\\\YTM2 = 4.72\\\\](https://tex.z-dn.net/?f=1080%20%3D%5Csum%20%5B%5Cfrac%7B%285.6%20%5Ctimes%20%5Cfrac%7B1000%7D%7B200%7D%29%7D%7B%281%20%2B%20%5Cfrac%7BYTM%7D%7B200%7D%29%5Ek%7D%5D%20%2B%5Cfrac%7B1000%7D%7B%281%20%2B%5Cfrac%7BYTM%7D%7B200%7D%29%5E%7B12%20%5Ctimes%202%7D%7D%20%5C%5C%5C%5Ck%3D1%5C%5C%5C%5CYTM2%20%3D%204.72%5C%5C%5C%5C)
The cost of the debt for the company:
Business debt cost=
after taxation cost of debt:
Answer:
intensity of rivalry
Explanation:
You answer this question based on Porter's Five forces model. This model is used to analyze how stiff competition is in a given industry. It includes, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, intensity of rivalry and threat of substitute goods. In this case, the leaders must address the intensity of rivalry because the market is already saturated with those three big companies. Therefore, your company must evaluate level of homogeneity of products that already exists, consumers' switching costs and brand loyalty to come up with a competitive strategy.
Answer:
The correct word for the blank space is: 16.
Explanation:
Percentages represent part of a number. The result could be higher or lower than the original number. Percentages are calculated by multiplying the original number for the amount of the percentage desired and dividing that preliminary result by one hundred (100).
Thus, in the example:
Sales closed per day = (Sale opportunities) x (percentage of sales closed)
Sales closed per day = 26 x 64%
Sales closed per day = 26 x (64/100)
Sales closed per day = 16,64
As sales cannot be fractioned, the sales closed per day are 16.
Answer:
PV= $1,311.17
Explanation:
Giving the following information:
Future Value (FV)= $5,000
Number of periods (n)= 25 years
Interest rate (i)= 5.5% compounded annually
T<u>o calculate the present value (PV), we need to use the following formula:</u>
<u></u>
PV= FV / (1+i)^n
PV= 5,000 / 1.055^25
PV= $1,311.17
