Valuation - options
The following information refers to a six-month call option on the stock of XYZ, Inc.
- Price of the underlying stock: $50
- Strike price of the three-month call: $45
- Market price of the option: $10
Valuation - zero-coupon bond
A U.S. Government bond with a face amount of $10,000 with 8 years to maturity is yielding 3.5%. What is the current selling price?
Valuation - corporate bond
A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)?
Charlie Company is expected to grow at an annual rate of 6% indefinitely. The return on similar stocks is currently 11%. Charlie's board of directors declared a dividend of $1.85 yesterday. What should a share of Charlie Company sell for?
Valuation - preferred stock
What is the value of a share of preferred stock that pays a $9.50 dividend, assume k is 12%.