Question: Please help me answer these questions asap! 4. Given a current dividend of $4.00 (just paid), a required rate of return of 8% and a

Please help me answer these questions asap!

4. Given a current dividend of $4.00 (just paid), a required rate of return of 8% and a dividend growth rate (g) of 2% for 10 years, compute the current value of the stock.

66.67

68

29.02

29.61

5. Assume an initial underlying stock price of $20, an exercise price of $20, a time to expiration of 3 months, a risk free rate of 12% and a underlying stock return variance of 16%. If the time to expiration increased to 6 months and assuming other variables are held constant, the call option value would

increase

remain the same

decrease

indeterminate from the information given

6. Which of the following call option determinants has a positive relationship with the call option value.

underlying stock return volatility

time to expiration

risk free rate

all of the above

7. Assume an initial underlying stock price of $20, an exercise price of $20, a time to expiration of 3 months, a risk free rate of 12% and a underlying stock return variance of 16%. If the underlying stock price decreased to $15 and assuming other variables are held constant, the call option value would

increase

remain the same

decrease

indeterminate from the information given

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