1 If you buy a call option for $15 on a stock priced currently at $80 and the strike prices is $82, is the option: A)In the money B)Out of the money C)Show me the money D)At the money   2 A certain company has expected next year earnings per share of $6. If the company wants to reinvest 60% of earnings into the firm, and the firm has an ROE of 10%. What is the current firm value if the firm has a required rate of return k=8%?

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A: Preferred stock are paid dividend each period and are paid at fixed rate of dividend.

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A: Strike price: It is the price at which the stock option is exercised. It means the price at which a…

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A: Put Option: It is the contract where a right is provided to the owner to sell a  certain amount of…

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A: Given Strike price =$60 and Premium of $5.

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