The price of chive corp. stock will be either $86 or $119 at the end of the year. call options are available with one year to expiration. t-bills currently yield 5 percent. a. suppose the current price of the company's stock is $97. what is the value of the call option if the exercise price is $85 per share? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) b. suppose the exercise price is $115 and the current price of the company's stock is $97. what is the value of the call option now? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Problem 9-5. net present value and taxes [lo 1, 2] penguin productions is evaluating a film project. the president of penguin estimates that the film will cost $20,000,000 to produce. in its first year, the film is expected to generate $16,500,000 in net revenue, after which the film will be released to video. video is expected to generate $10,000,000 in net revenue in its first year, $2,500,000 in its second year, and $1,000,000 in its third year. for tax purposes, amortization of the cost of the film will be $12,000,000 in year 1 and $8,000,000 in year 2. the company’s tax rate is 35 percent, and the company requires a 12 percent rate of return on its films. required what is the net present value of the film project? to simplify, assume that all outlays to produce the film occur at time 0. should the company produce the film?

3. describe the purpose of the sec. (1-4 sentences. 2.0 points)

Apopular low-cost airline, parson corp., has gone out of business. although the service and price provided by the airline was what customers wanted, the larger airlines were able to drive the low-cost airline out of business through an aggressive price war. which component of the competitive environment does this illustrate? a) threat of new entrants b)competitors c) economic factors d) customers d) regulators