Use the Black-Scholes formula to find the value of a call option on Capybara stock. Show your work. Time to expiration = 1 year Standard deviation = 50% per year Exercise price = $115 Stock price = $100 Interest rate = 8% per year Dividend Yield = 2% per year Standard Deviation of stock’s rate of return = .5 (50% per year)
A company has earnings per share of $3.82 from which it just paid $1.34 in dividends (think payout rate). The firm has an ROA of 17% and an ROE of
A company has earnings per share of $3.82 from which it just paid $1.34 in dividends (think payout rate). The firm has an ROA of 17% and an ROE of 22%. The market earns 15% while T-bills earn 4.5%. The stock has a beta of 1.56. What is the price