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Mike was granted stock options on 1,000 shares of his employer's stock. The stock is currently selling for $27.70 a share and has a standard deviation of 36 percent. The option's strike price is $27.50 and the time to maturity is 10 years. What is the value of each option given a risk-free rate of 3 percent? Assume that no dividends are paid. Select one: a. $14.35 b. $15.67 c. $17.80 d. $20.15 e. $22.70

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Financial Management, Finance

Category:- Financial Management
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