Lane Litton Finc. 354 Hw. 7
Chapter 19
1) A) Intrinsic value = 26-25= 1$
B)
Price of
Stock
Value of Call at
Expiration
20
0
25
0
30
5
40
15
calculations
20-25 = -5 (cant be
neg)
25-25 = 0
30-25= 5
40-25=15
C) price of the call rises from 4 to 15$. 11$ inc
Lane Litton Finc. 354 Hw 4
Chapter 13
3)
Debt/Equity = 700,000/300,000= 2.333
Debt Ratio = 700,000 / (700,000 + 300,000) = .7
4) 500,000/4 = 125,000 200,000 125,000 = 75,000 reduction in inventory would give them
turnover
4x/year
5)
Deb
t
Amount
($)
Inter
Lane Litton Finc. 354 Hw. 3
Chapter 9
2)
$1(1+.07) = $21.40 , the investor will not find this stock attractive, the investor would be
willing
.12 - .07
to pay $21.40 or less.
4)
k = .09 + (.15-.09) 1.5 = .18 $1(1+.06) = $8.83
.18 - .06
7)
k = .074+ (.12-.
Lane Litton Finance 354 Hw
1
Chapter 3
1) A) 100 x 17.5 = 1750 1750- 1000 = 750
25% x 1000 = 250 750/250 = 3 or 300%
B) 50% x 1000 = 500 750/500 = 1.5 or 150%
C) 75% x 1000 = 750 750/750 = 1 or 100%
Is this correct? For some reason these numbers seem real