You own the rights to a biotech drug. Your best estimate is that the current value of
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You own the rights to a biotech drug. Your best estimate is that the current value of these rights is $50 million. Assuming that the annual volatility of biotech companies is 90 percent and the risk-free rate is 5 percent, what is the value of an option to sell the rights to the drug five years from now for $40 million?
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ANSWER Using BlackScholes option pricing model In this case we have Current value of the r...View the full answer
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Microsoft Excel Data Analysis And Business Modeling
ISBN: 9780137613663
7th Edition
Authors: Wayne Winston
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