Gasworks, Inc., has been approached to sell up to 5 million gallons of gasoline in three months
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Gasworks, Inc., has been approached to sell up to 5 million gallons of gasoline in three months at a price of $1.85 per gallon. Gasoline is currently selling on the wholesale market at $1.63 per gallon and has a standard deviation of 61 percent. If the risk-free rate is 6 percent per year, what is the value of this option?
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Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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