The CEO of WeStudy has a personal cost of working C(H) = 15H2, where H is the number of days she works hard each quarter. Without any effort, the company's stock is expected be worth $50, but for each day she works hard, there is a 0.3% probability WeStudy's next quarterly earnings announcement will top the Wall Street consensus estimate, in which case the company' stock price will increase by $20. Suppose the CEO holds 25,000 shares of WeStudy's stock while the outside investors hold 3 million shares. What is WeStudy's expected outsideequity value (in million dollars)?

Answer rating: 100% (QA)

The expected increase in stock price due to the CEOs effort is 03 20 006 per day of hard work Let X ... View the full answer