The price of swearengen inc stock will be either 80 or 102, Ask an Expert

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The price of Swearengen, Inc., stock will be either $80 or $102 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 6 percent.

a. Suppose the current price of the company's stock is $91. What is the value of the call option if the exercise price is $76 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Call value $

b. Suppose the current price of the company's stock is $91. What is the value of the call option if the exercise price is $86 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Call value $

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Financial Management, Finance

Category:- Financial Management
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