Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 20, Problem 22PS
Put–call parity The common stock of Triangular File Company is selling at $90. A 26-week call option written on Triangular File’s stock is selling for $8. The call’s exercise price is $100. The risk-free interest rate is 10% per year.
- a. Suppose that puts on Triangular stock are not traded, but you want to buy one. How would you do it?
- b. Suppose that puts are traded. What should a 26-week put with an exercise price of $100 sell for?
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General Finance Question
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):
Income Statement
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$ 40,000 Assets
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Net income $ 5,840
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Total
$26,000
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$ 31200
Pro forma balance sheet
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$ 31200
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30304
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should be indicated by a minus sign.)
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$
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Chapter 20 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 20 - Vocabulary Complete the following passage: A _____...Ch. 20 - Option payoffs Note Figure 20.13 below. Match each...Ch. 20 - Option combinations Suppose that you hold a share...Ch. 20 - Put-call parity What is put-call parity and why...Ch. 20 - Prob. 5PSCh. 20 - Option combinations Dr. Livingstone 1. Presume...Ch. 20 - Option combinations Suppose you buy a one-year...Ch. 20 - Prob. 8PSCh. 20 - Prob. 9PSCh. 20 - Option values How does the price of a call option...
Ch. 20 - Option values Respond to the following statements....Ch. 20 - Option combinations Discuss briefly the risks and...Ch. 20 - Option payoffs The buyer of the call and the...Ch. 20 - Option bounds Pintails stock price is currently...Ch. 20 - Putcall parity It is possible to buy three-month...Ch. 20 - Prob. 16PSCh. 20 - Option values FX Bank has succeeded in hiring ace...Ch. 20 - Option combinations Suppose that Mr. Colleoni...Ch. 20 - Put-call parity A European call and put option...Ch. 20 - Putcall parity a. If you cant sell a share short,...Ch. 20 - Putcall parity The common stock of Triangular File...Ch. 20 - Prob. 23PSCh. 20 - Option combinations Option traders often refer to...Ch. 20 - Option values Is it more valuable to own an option...Ch. 20 - Option values Table 20.4 lists some prices of...Ch. 20 - Option values Youve just completed a month-long...Ch. 20 - Prob. 29PSCh. 20 - Prob. 30PS
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