Questions from General Investment

Q: Given the following information for Smashville, Inc., construct a balance

Given the following information for Smashville, Inc., construct a balance sheet: Current liabilities: ……………………………………………….$42,000 Cash: ………………………………………………………………….$21,000 Long-term debt: ……………………………………...

Q: Weston Corporation had earnings per share of $1.64,

Weston Corporation had earnings per share of $1.64, depreciation expense of $310,000, and 140,000 shares outstanding. What was the operating cash flow per share? If the share price was $43, what was t...

Q: Alphonse Inc. has a return on equity of 12 percent,

Alphonse Inc. has a return on equity of 12 percent, 28,000 shares of stock outstanding, and a net income of $98,000. What are earnings per share?

Q: What is the value of a call option if the underlying stock

What is the value of a call option if the underlying stock price is $73, the strike price is $75, the underlying stock volatility is 37 percent, and the risk-free rate is 5 percent? Assume the option...

Q: Suppose you buy 50 April 100 call option contracts. How much

Suppose you buy 50 April 100 call option contracts. How much will you pay, ignoring commissions?

Q: In Problem 4, suppose that Hendreeks stock is selling for $

In Problem 4, suppose that Hendreeks stock is selling for $105.70 per share on the expiration date. How much is your options investment worth? What if the stock price is $101.60 on the expiration date...

Q: Mr. Franklin is interested in the sensitivity of the put option

Mr. Franklin is interested in the sensitivity of the put option to changes in the volatility of the underlying equity’s returns. If the volatility of the underlying equity’s returns increases, the val...

Q: Suppose you buy 30 March 100 put option contracts. What is

Suppose you buy 30 March 100 put option contracts. What is your maximum gain? On the expiration date, Hendreeks is selling for $84.60 per share. How much is your options investment worth? What is your...

Q: What is the value of a put option if the underlying stock

What is the value of a put option if the underlying stock price is $42, the strike price is $35, the underlying stock volatility is 47 percent, and the risk-free rate is 5 percent? Assume the option h...

Q: A stock with an annual standard deviation of 30 percent currently sells

A stock with an annual standard deviation of 30 percent currently sells for $67. The risk-free rate is 3 percent. What is the value of a put option with a strike price of $80 and 60 days to expiration...