Question: Q6. Based on Black and Scholes model, the fair value of the above call option should be $....... Use the following information to answer question
Q6. Based on Black and Scholes model, the fair value of the above call option should be $....... Use the following information to answer question 7-9. Assume the latest EPS was $1.50 going down by 8% each year for the following 2 years and then going up by 15% each year for the following three year Thereafter the annual growth rate is constant at the annual growth rate of GDP of 5%. The beta is 1.50. the risk-free rate is 3%. The market risk premium is 6% Q7. The PV of EPS of the year five is Q8. The price as of the year five (P5) is $ Q9. The price as of today (PO) is $
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