Essay
The CFO of NuValue was granted 1,000,000 options.The equity price at the time of the granting of
the options was £20 and the options are at the money.The risk free rate was 4% and the options
expire in 5 years.The variance on the equity is .05.What is the value of her options contract? If she
had negotiated a larger salary and only 10,000 options, what would be the value of the options
contract?
Correct Answer:
Verified
d1 = [.04 + (.50x.05)(5)]/ √(.05)5
d1 = ...View Answer
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Correct Answer:
Verified
d1 = ...
View Answer
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