The Quick-time Company stock is currently selling for $32. There is a put option on the stock rith an exercise price of $29 with 6 months to maturity. The risk free rate is 2% and the ariance is .0625. A What is the value of the put? Provide all your calculations for components (N(-d1), etc.) B. What is the value of the call using Put-Call parity? C. If Light-Step paid a dividend of $0.75 per share what would be the value of the put?

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A: Inflation rate = 4.8% Real rate = 2.2%

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A:

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A:

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A: Here,

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A: Weighted Average cost of capital (WACC): The WACC is the overall cost of capital from all the source...

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A:

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A: Formula's Calculations: Therefore; WACC is 6.24%

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.