You have taken a management position in Ocean Cuisines plc that just went public last year. The company’s restaurants specialize in seafood dishes. A concern you had was that the restaurant business is risky. During your interview process, one of the benefits you heard was employee stock option. Upon signing your employment contract, you obtained options with a strike price of £65 for 10,000 shares of company stock. As is fairly common, your stock options have a three-year vesting period and a 10-year expiration, meaning that you cannot exercise the options for a period of three years and you lose them if you leave before they vest. So your employee stock options are European for the first three years and American afterward. You cannot sell the option nor can you enter into any sort of hedging. Ocean Cuisines is currently trading at £40 per share, a slight increase from the initial offering price last year. You estimated that the annual average standard deviation for restaurant company stock is 20 percent. Since Ocean Cuisines is a new restaurant chain you decide to use a 25percent standard deviation in your calculations. You expect no dividends will be paid for the next 10 years. A three-year Treasury note currently has a yield of 3.4% and 10 year Treasury note has an yield of 6%.
1. Suppose that in three years, company’s stock is trading at £55. At that time, should you keep the options or exercise immediately? What are some of the important determinants in making such a decision? 2. You are trying to value your option. What minimum value would you assign? What is the maximum value you would assign?
Our Service Charter
Excellent Quality / 100% Plagiarism-Free
We employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers.
Free Revisions
We keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed.
Confidentiality / 100% No Disclosure
We make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service.
Money Back Guarantee
If the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit.
24/7 Customer Support
We have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.
