You own a one-year European call option to buy one acre of Los Angeles real estate. The exercise price is $2.06 million. Suppose the land is occupied by a warehouse generating rents of $180,000 after real estate taxes and all other out-of-pocket costs. The present value of the land plus the warehouse is $1.76 million. The annual standard deviation is 15% and the interest rate is 13% How much is your call worth? (Enter your answer in dollars not in millions. Do not round intermediate calculations.)

You own a one-year European call option to buy one acre of Los Angeles real estate. The exercise price is $2.06 million. Suppose the land is occupied by a warehouse generating rents of $180,000 after real estate taxes and all other out-of-pocket costs. The present value of the land plus the warehouse is $1.76 million. The annual standard deviation is 15% and the interest rate is 13% How much is your call worth? (Enter your answer in dollars not in millions. Do not round intermediate calculations.)

Name: Qd 36. You own a one-year European call option to buy one acre of Los
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Description: Qd 36. You own a one-year European call option to buy one acre of Los Angeles real estate. The exercise price is $2.06 million. Suppose theland is occupied by a warehouse generating rents of $180,000 after real estate taxes and all other out-of-pocke

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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