Question: (a) (b) (c) (d) You decide to buy a single share of Tesla stock (TSLA). It is currently valued at $891.29 per share. In

(a) (b) (c) (d) You decide to buy a single share of

(a) (b) (c) (d) You decide to buy a single share of Tesla stock (TSLA). It is currently valued at $891.29 per share. In 4 months, TSLA will have their next earnings announcement, and you are hoping they will exceed analysts' expectations. Assume you have an interest rate of r = 0.02 (2%) per annum, and that all interest is compounded continuously. (2.00 Points) At the 4-month earnings call, what price does TSLA need to reach for you to break even? Create a payoff and profit diagram for this transaction. Be sure to label all axis, and to indicate the breakeven point. TSLA has an unexpectedly low earnings report, and their stock drops to $869.42. What is your total payoff and what is your total profit if you sell? Ellon Musk tweets that Tesla will now accept Dogecoin as payment and the internet goes wild. TSLA price jumps to 964.20 per share. What is your total payoff and total profit if you sell?

Step by Step Solution

★★★★★

3.36 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The Omega Manufacturing Company has discontinued the production of a certain unprofitable product line. This act created considerable excess production capacity. Management is considering devoting...

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...

As a lender, go through the information provided and determine if the clients qualify for their loan request.(set your calculator to two decimal points. Note there are questions that require you to...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

11) Jae Ho buys a BBB rated 1000 Microsoft Bond 3% cpn, maturing in 12/202020. The current yield on the bond is 3%. Based on this information what do we know about the bond's price? I

You decide to buy a single share of Tesla stock (TSLA). It is currently valued at $891.29 per share. In 4 months, TSLA will have their next earnings announcement, and you are hoping they will exceed...

1. You decide to buy a single share of Tesla stock (TSLA). It is currently valued at $891.29 per share. In 4 months, TSLA will have their next earnings announcement, and you are hoping they will...

Despite Teslas poor performance recently, you believe it can go lower still. You decide to short a single share of Tesla stock (TSLA). It is currently valued at $123.22 per share. In 1 month, TSLA...

You decide to buy a single share of Alphabet Inc.s Class A stock GOOGL. It is currently valued at $1,469.93 per share. In 3 months, Google will have their next earnings announcement, and you are...

Let p, q, r, s be four distinct primes and m, n, k, l Z+. How many edges are there in the Hasse diagram of all positive divisors of (a) p3; (b) pm; (c) p3q2; (d) pmqn; (e) p3q2r4; (f) pmqnrk; (g)...

Which situation is represented by the inequality 30x+175>=25x+150 ? Stevie earns $30 for each insurance policy he sells plus $175. Daniel earns $25 for each policy she sells plus $150. How many...

You are a marketing manager for a sporting goods manufacturer that is launching a new la Dick's Sporting Goods and Academy Sports Outdoors, and also Target and Walmart. One mass merchandisers is...

Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2009 and 2010: May 2009...

A gas storage tank with a floating roof receives a steady input of 540 m3/h of a natural gas. The rate of withdrawal of gas from the tank, vw, varies more or less randomly during the day and is...

In its first month of operations, Quirk Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at $8.Assuming there are 360...

A data acquisition system for environmental monitoring is used to record the temperature of an air stream as measured by a thermocouple. It shows an essentially sinusoidal variation after about 15 s....

For each of the following transfer functions, develop both the amplitude and phase angle of the Bode plot. Find AR and ? for each transfer function at of values of w = 0.1,1, and 10. (a) (Ss + 1)(s +...

Use a definite integral to find the area under the curve between the given x-values.f(x)=2xfrom x =1 to x =5 square units

Myles Houck holds 600 shares of Lubbock Gas and Light. He bought the stock several years ago at $48.50, and the shares are now trading at $75. Myles is concerned that the market is beginning to...

Describe the differing investment philosophies typically applied during each of the following stages of an investors life cycle. a.Youth (ages 20 to 45) b.Middle age (ages 45 to 60) c.Retirement...

Assume that an investor buys 100 shares of stock at $50 per share, putting up a 60% margin. If the stock rises to $60 per share, what is the investor's new margin position?

Two-thirds of the weight of a 1500 kg car rests on the drive wheels. What is the maximum acceleration of this car on a concrete surface?

A steel cable lying flat on the floor drags a 20 kg block across a horizontal, friction less floor. A 100 N force applied to the cable causes the block to reach a speed of 4.0 m/s in a distance of...

The sled dog in FIGURE EX7.14 drags sleds A and B across the snow. The coefficient of friction between the sleds and the snow is 0.10. If the tension in rope 1 is 150 N, what is the tension in rope...