Principles of Corporate Finance_ 12th Edition

552 Part Six Options bre44380_ch21_547-572.indd 552 10/05/15 12:53 PM Valuing the Put Option by the Risk-Neutral Method Valuing ...

Chapter 21 Valuing Options 553 bre44380_ch21_547-572.indd 553 10/05/15 12:53 PM ◗ FIGURE 21.1 This figure shows the possible six ...

554 Part Six Options bre44380_ch21_547-572.indd 554 10/05/15 12:53 PM ◗ FIGURE 21.2 Present and possible future prices of Google ...

Chapter 21 Valuing Options 555 bre44380_ch21_547-572.indd 555 10/05/15 12:53 PM Option Value in Month 3 Now we can find the poss ...

556 Part Six Options bre44380_ch21_547-572.indd 556 10/05/15 12:53 PM there is a neat little formula that relates the up and dow ...

Chapter 21 Valuing Options 557 bre44380_ch21_547-572.indd 557 10/05/15 12:53 PM Is the binomial method merely another applicatio ...

558 Part Six Options bre44380_ch21_547-572.indd 558 10/05/15 12:53 PM never fall by more than 100%, but that there is some, perh ...

Chapter 21 Valuing Options 559 bre44380_ch21_547-572.indd 559 10/05/15 12:53 PM Here are the data that you need: ∙ Price of stoc ...

560 Part Six Options bre44380_ch21_547-572.indd 560 10/05/15 12:53 PM Step 3 Plug these numbers into the Black–Scholes formula. ...

Chapter 21 Valuing Options 561 bre44380_ch21_547-572.indd 561 10/05/15 12:53 PM The Black–Scholes Formula and the Binomial Metho ...

562 Part Six Options bre44380_ch21_547-572.indd 562 10/05/15 12:53 PM were given warrants to buy the new common stock at any poi ...

563 bre44380_ch21_547-572.indd 563 10/05/15 12:53 PM ● ● ● ● ● FINANCE IN PRACTICE ❱ On an October day in 1999, the shares of th ...

564 bre44380_ch21_547-572.indd 564 10/05/15 12:53 PM BEYOND THE PAGE mhhe.com/brealey12e Dilution ● ● ● ● ● FINANCE IN PRACTICE ...

565 bre44380_ch21_547-572.indd 565 10/05/15 12:53 PM reduce its value. Since an American call should not be exercised before mat ...

566 Part Six Options bre44380_ch21_547-572.indd 566 10/05/15 12:53 PM should reduce the price of the stock by the present value ...

Chapter 21 Valuing Options 567 bre44380_ch21_547-572.indd 567 10/05/15 12:53 PM In this chapter we introduced the basic principl ...

568 Part Six Options bre44380_ch21_547-572.indd 568 10/05/15 12:53 PM Option delta a. Can the delta of a call option be greater ...

Chapter 21 Valuing Options 569 bre44380_ch21_547-572.indd 569 10/05/15 12:53 PM Binomial model Suppose a stock price can go up ...

570 Part Six Options bre44380_ch21_547-572.indd 570 10/05/15 12:53 PM d. Use your answer to part (c) to calculate the option del ...

Chapter 21 Valuing Options 571 bre44380_ch21_547-572.indd 571 10/09/15 09:27 PM Option risk In Section 21-1 we used a simple on ...