Respuesta :
The current value per share of a one-year call option on Mercury Motors stock if the exercise price is $22.50 and you assume the option will finish in the money is $7.08.
The value is computed as follows:
= Selling price per share - Exercise price / (1 + US treasury rate)
= $ 28.97 - $ 22.50 / (1 + 0.028)
= $ 7.08 Approximately.
- According to the theory of current value accounting, assets and liabilities should be valued at the price at which they could be sold or settled as of the current date. This is different from the conventional practice of recording assets and liabilities only at the amounts at which they were initially acquired or incurred. The International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) have both been moving in the direction of requiring more current value accounting, so that fewer assets and liabilities are still recorded on the balance sheet at their original costs.
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