The current market price for common shares of ABC Company is $25. Call options on these shares currently trade at 1.50, and come with an $30 exercise price. If the stock’s market price rose to $35 what would be the dollar payoff? your answer should like this: 4.00 that is not the right answer

The current market price for common shares of ABC Company is $25. Call options on these shares currently trade at 1.50, and come with an $30 exercise price. If the stock’s market price rose to $35 what would be the dollar payoff? your answer should like this: 4.00 that is not the right answer

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 4EP

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

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your answer should like this: 4.00

that is not the right answer

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