You have been offered the chance to purchase stock in a firm. The seller wants $55 per
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You have been offered the chance to purchase stock in a firm. The seller wants $55 per share, but offers to repurchase the stock at the end of one half year for $50 per share. If the σ of the share’s log returns is 80% determine the true value per share. Assume that the interest rate is 10%.
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The true value of the stock per share can be determined by calculating the expected return on th...View the full answer
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