The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $73 per share You have employee stock options to purchase 1,000 TWTR shares for $78 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 63 percent and that the interest rate is 2.9 percent. (Assume the options are European options that may only be exercised at the maturity date) a is this option a call or a put? O Call O Put b. Using an option pricing calculator such as the one at erien.com/blackscholes, estimate the value of your TWTR options. Note: Round your Intermediate calculations to 2 decimal places and final answer to nearest whole doller. Value of your TWTR options

The common shares of Twitter, Incorporated (TWTR) recently traded on the NYSE for $73 per share You have employee stock options to purchase 1,000 TWTR shares for $78 per share. The options expire in three years. Assume that the annualized volatility of TWTR stock is 63 percent and that the interest rate is 2.9 percent. (Assume the options are European options that may only be exercised at the maturity date) a is this option a call or a put? O Call O Put b. Using an option pricing calculator such as the one at erien.com/blackscholes, estimate the value of your TWTR options. Note: Round your Intermediate calculations to 2 decimal places and final answer to nearest whole doller. Value of your TWTR options

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter20: Financing With Derivatives

Section: Chapter Questions

Problem 17P

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