Assume today is 1 July 2020 Pakistan Refinery Limited Current share price Rs. 240 Option purhases :

Fantastic news! We've Found the answer you've been seeking!

Question:

Assume today is 1 July 2020

Pakistan Refinery Limited

Current share price Rs. 240

Option purhases : Put option (Right to Sell) - Sell now & Buy later

Tenure : 3 years (30 June 2023)

Risk Free rate = 9%

Expectation:

At the end of year 1 = price increased by 11% or decrease by 14%

At the end of year 2 = price increasedby 15% or decrese by 21%.

At the end of year 3 = Price incresed by 13% or decrease by 8%

Exercise price Rs. 243.

Required:

Calculate the value of put option?

Related Book For answer-question

Global Strategy

ISBN: 9780357512364

5th Edition

Authors: Mike W. Peng

See More Books

Posted Date: May 13, 2024 06:29 AM

See More Questions

Kaheka Hawaiian Grill has computed the net present value for capital expenditures for the San Jose and Malibu locations using the net present value method. Relevant data related to the computation...
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...
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...
Determine the length of the hydrogen bonds between: TYR41H and GLU37O ALA39H and MET35O GLU38H and ILE34O THR36H and ARG32O ARG32H and TYR28O by using PyMOL And identify the residues located at...
In year 0, Jarmex paid $55,000 for an overhaul of a tangible operating asset. Jarmex has a 34 percent marginal tax rate and uses a 7 percent discount rate to compute NPV. a. Compute the after-tax...
Use the spreadsheet template provided by your instructor to prepare the following operating budgets for the first quarter: (a) Sales budget/Cash collections Budget (b) Direct materials purchases...
If a printer connected to your local network does not get a dynamically assigned IP address from the DHCP server, an IP address can be manually configured. What type of IP address is this?
Recalculate the cost of the five orders using activity based costing. Comment on the difference in cost for order 28 (staircases) and order 32 (desks) before and after using ABC. Are the costs...
HAL Corp is a major IT support company that maintains a minimum critical staff for one of it's customers (a financial institution) on the overnight shift every week. The manager Olga estimates the...
The customers and the potential facilities of a country have been aggregated in seven regions as shown in Figure 1. Figure 1: A B D E F G A 0 7 4 5 12 7 14 B 7 0 11 12 12 14 11 A A company would...
12. On December 1, 2011, Keenan Company, a U.S. firm, sold merchandise to Velez Company of Canada for 150,000 Canadian dollars (CAD). Collection of the receivable is due on February 1, 2012. Keenan...
Contrast the yield curves data of March 1993 and March 1998. Notice that the 1998 yield curve is almost flat, it has very little slope, while the 1993 yield curve has a very steep slope. What could...

Assume today is 1 July 2020 Pakistan Refinery Limited Current share price Rs. 240 Option purhases :

Question:

Expert Answer:

Given Current share price Rs 240 Option Put option right to sell Tenure 3 years till 30Jun2023 Risk ... View the full answer

Global Strategy

Students also viewed these finance questions