What would be the change in ft20mf ins equity value

What would be the change in FT20MF in’s equity value with the conversion?
Part IV (5.0 points)
Rascasso, Inc. is a holding company, with headquarters in Azores. Rascasso is about to
enter in a deal where it can sell one of its portfolio companies – Sustainable Fishing –
a food supplier chain, over the next twelve months.
Sustainable Fishing has a market value of €5 million. It operates in a risky environment
because of the continuous development of new technologies and consumers’
preferences. The food supplier chain is evaluating the deal with its investment bankers.
One of them says the company’s price is likely to increase 25%. However, another one
says its value will decrease 25%. The interest rate is 5.00% a year.
a) (1.5 points) Suppose that Rascasso, Inc. and the food supplier chain agree on a
deal with an exercise price of €5,000,000. What is the value of this option?
to
b) (1.5 points) Consider an increase in an American option’s maturity. Would the
change increase or decrease the value of the option? Explain.
c) (2.0 points) Suppose that Rascasso, Inc. requires and the food supplier chain
accepts that the option can be exercised in 12 months or in 24 months (all other
business conditions are unchanged). What is the value of the option?