Answer:
According to put-call parity, the anticipated share price is $31.95.
Explanation:
Given values:
share price = $31.63
yearly dividend = $1.50 per year
strike price = $27
call price = $6.10
put price = $2.65
expiry duration = 1 year
Solution:
Put-Call Parity expresses the price relationship between a put option, a call option, and the underlying stock.
We will apply the fundamental put-call parity formula, which states:
Po + So = Co + (D + X × 
...................1
In this equation, Po is the put option, Co is the call option, X is the strike price, So is the stock price, and D represents dividend, which is 0 in this case.
This means the stock price can be calculated as:
So + Po = Co + D + X
So + $2.65 = $6.10 + $1.5 + $27
So = $31.95
Thus, the predicted share price in accordance with the put-call parity is $31.95.
Answer:
Explanation:
A)
The formula for regression is,
ln(Cell Phone Subscribers) = -820.894 + 0.411704 Year
or,
Percentage of Cell Phone Subscribers = exp(-820.894 + 0.411704 Year)
For the year 2005,
Percentage of Cell Phone Subscribers = exp(-820.894 + 0.411704 * 2005)
= 96.79%
B)
The significance of the slope has a p-value close to 0 (0.000). Hence, the model holds statistical significance and its predictions are very reliable.
Answer:
Mike's acknowledged gain from the transfer of the house to him is:
$175,000
Explanation:
a) Data and Calculations:
Marital property = $1,500,000
Cost of property = $575,000
Residual value = $925,000
Alimony to Karen = $750,000 ($150,000 * 5)
Balance (Mike's) = $175,000
The amount of $175,000 signifies the surplus of the fair market value of the marital property after accounting for the property's cost and the alimony paid to Karen. Thus, Mike recognizes a gain of $175,000 following the property sale.
Response:
The buyer has the option to pursue specific performance of the contract. In real estate transactions, to be able to take legal action for specific performance, the buyer must have the necessary funds (or mortgage) ready for closing. It’s challenging to claim damages due to the unwillingness of the seller to proceed with a house sale, as houses are unique; similar properties may vary greatly in value depending on their locations.
By pursuing specific performance, the non-breaching party requests that the other party fulfill their obligations under the contract.
