The risk-free rate is 488 and the option expires in 9


1. Judy's Boutique just paid an annual dividend of $3.49 on its common stock. The firm increases its dividend by 3.60 percent annually. What is the company's cost of equity if the current stock price is $43.00 per share?

2. Explain how financial markets could help to finance the growth of a business.  

3. Consider a call option with an exercise price of $50 on a stock with a price of $52.75 and a volatility of 0.35. The risk-free rate is 4.88%, and the option expires in 9 months. What is the fair value of the call option using the Black-Scholes model?

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Financial Management: The risk-free rate is 488 and the option expires in 9
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