We wish to cap participation in a 3-year equity-linked option at 50.0% return. Our profit alpha is 3.0%. The S&P 500 price = 950, div = 0.015, ? = 0.22, and interest rates are 4.8%. What is the implied participation rate?
A)
0.66
B)
0.76
C)
0.96
D)
1.16
Answer:
B
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One of the purposes of the statement of cash flows is to ________.
A) determine the operating income of a business B) to calculate inventory turnover C) evaluate the level of debt and leverage of a company D) predict the ability of a company to pay debts and dividends
Answer the following statements true (T) or false (F)
1. Financial projections are usually very precise and correspond almost identically to reality. 2. Financial projections are built around sales in USD. 3. Linear trends are most useful. 4. For startup firms, projections over long time horizons are rarely supported by either historic data or by methodologies that have good predictive power. 5. When dealing with expenses, direct costs are not projected in the same manner as revenue.
Earnings available to common shareholders represents income that may be reinvested in the firm
or distributed to its owners. Indicate whether the statement is true or false
The rights of a surety include ________
a. exoneration b. accession c. consideration d. formation