Included were stock options to buy more than 800,000 shares of NEV stock. How will the options affect NEV’s compensation expense?
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Included were stock options to buy more than 800,000 shares of NEV stock. How will the options affect NEV’s compensation expense?
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- An investor has exchange-traded put options to sell 100 shares for $20. There is a $1 cash dividend declared. Which of the following is the position of the investor after the cash dividend? Put options to sell 100 shares for $21.00 Put options to sell 100 shares for $20.00 Put options to sell 105 shares for $19.00 Put options to sell 105 shares for $19.053. Kelly has one share of a stock. She has two days to sell her stock. At the opening of the stock market on each day, she decides whether to hold or sell the stock. If she decides to sell the stock, she sells it at the opening price. On each day, the stock price is expected to increase by $20 with probability 0.4 and decrease by $16 with probability 0.6 at the closing of the market. Assume that the opening price on the first day is $100. Kelly wants to maximize her wealth. a. Construct a decision tree for Kelly's stock selling problem. b. Find an optimal decision strategy for Kelly using the expected value approach. What is the expected value of the optimal decision strategy? Show the backward pass procedure.Assume we are in July, 2023. In July of 2023, the share prices of company B are $80 per share. You believe they should be $30 per share, and are thus overvalued. December 2023 put options on a strike price of $60 per share are currently valued at $5. Each put contract is based on 100 shares. a.) What is your net dollar profit or loss as a holder of the put contract (based ona contract size of 100 shares) if we arrive at expiry in December and you are wrong and Company B shares are selling for $100?
- XYZ purchased a call option 3 months ago for $300 ($3 per share). It gives XYZ the right to buy 100 shares in Morley Tobacco for $20 per share. The call option expires today. What is the lowest price that XYZ should exercise at and what is that lowest price at which XYZ would realize a profit?Stock options are one of the riskiest and potentially lucrative financial instruments available to investors. Stock options give the investor the right to buy or sell a particular stock for a stated price within a specified period of time. For example, on December 20th, an investor who believed that the stock of Apple Computer, Inc. was underpriced at $171.54, could buy an option to purchase 100 shares of Apple for $176.00 per share at any time until December 31st. The price of the option was $2.60 per share. Assume the investor purchased the option for $260.00 and Apple stock rose to $179.85 on Dec 23rd. Further, assume the investor exercised the option and bought the stock for $176.00 per share on Dec 23rd and immediately sold the stock for $179.85 per share. What rate of return did the investor make in 3 days from Dec 20th to the 23rd? (Round the final answer to two decimal places.) The rate of return is _________%.On January 1, 2020, Simon Love's portfolio of 15 common stocks had a market value of $256,000. At the end of May 2020, Simon sold one of the stocks, which had a beginning-of-year value of $26,600, for $31,800. He did not reinvest those or any other funds in the portfolio during the year. He received total dividends from stocks in his portfolio of $11,700 during the year. On December 31, 2020, Simon's portfolio had a market value of $245,000. Find the HPR on Simon's portfolio during the year ended December 31, 2020. (Measure the amount of withdrawn funds at their beginning-of-year value.) C Simon's portfolio HPR during the year ended December 31, 2020, is%. (Round to two decimal places.)
- Carlos purchased 2,000 shares of a common stock last June 2017 for Php 3,200,000. In June 2018, he then sold 1,000 shares of the common stock for Php 1,800 per share. The remaining 1,000 shares were finally sold for Php 2,000 per share in June 2019. What was Carlos's internal rate of return (IRR) on this investment? Use spreadsheet solution.Assume we are in July, 2023. In July of 2023, the share prices of company B are $80 per share. You believe they should be $30 per share, and are thus overvalued. December 2023 put options on a strike price of $60 per share are currently valued at $5. Each put contract is based on 100 shares. a.) What is your net dollar profit or loss as a holder of the put contract (based ona contract size of 100 shares) if we arrive at expiry in December and you are wrong and Company B shares are selling for $100? (Show your working in full)The following events occurred regarding the company's executive compensation plan. 2. On 1/1/x4, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 20,000 shares of common stock at $40 per share. The par value is $10 per share. 3. On 2/1/x4, options were granted to each of five executives to purchase 20,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/x6. It is assumed that the options were for services performed equally in 20x4 and 20x5. The Black-Scholes option pricing model determines total compensation expense to be $2,100,000. 3. At 2/1/x6, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited Prepare the journal entries for 2/1/x6
- You purchase one Virgin Galactic March 120 put contract (equalling 1000 shares) for a put premium of $10. You hold the option until the expiration date, when Virgin Galactic stock sells for $110 per share. a) How much is the realized profit/loss on the transaction? b) What is the maximum profit that you can realize on this position? Explain your answer! c) What is biggest loss that you can suffer on this position? Explain your answer!d) What is the realized profit/loss of your counterparty (the buyer of this call option)? Explain your answer! Provide a long and detailed answer please <3Suppose you have an option to buy a share of ABC Corp stock for $100. The option expires tomorrow, and the current price of ABC Corp is $95. How much is your option worth?You purchase one Virgin Galactic March 120 put contract (equalling 1000 shares) for a put premium of $10. You hold the option until the expiration date, when Virgin Galactic stock sells for $123 per share. a) How much is the realized profit/loss on the transaction? b) What is the maximum profit that you can realize on this position? c) What is biggest loss that you can suffer on this position? d) What is the realized profit/loss of your counterparty (the buyer of this call option)? Please briefly explain the calculations as well, thanks!
