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Assume that you, as an STI employee, were awarded options on 1,000 shares of STI stock...

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Finance

Assume that you, as an STI employee, were awarded options on1,000 shares of STI stock today at the current market price.Without doing a detailed numerical calculation, make yourbest-guess estimate as to the economic value of this option grant.What factors did you consider in making your estimate? Would thisoption grant likely affect any of your behaviors? If so, how?

Answer & Explanation Solved by verified expert
3.7 Ratings (366 Votes)
Volatility It measure how much the stock prices varies from day to day It undergo larger and more frequent price changes than nonvolatile stocks A small change in the volatility estimate can have a significant impact on the price of an option Looking at the broad market trends that will push up the profits    See Answer
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Assume that you, as an STI employee, were awarded options on1,000 shares of STI stock today at the current market price.Without doing a detailed numerical calculation, make yourbest-guess estimate as to the economic value of this option grant.What factors did you consider in making your estimate? Would thisoption grant likely affect any of your behaviors? If so, how?

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