Sally Jameson Case Study Thomas Virolle Pablo Méndez Question 1 If we ignore tax considerations and assume that Sally Jameson is free to sell her options at any time after she joins Telstar she has several chooses. She can either choose to take the cash bonus‚ either take the options and sell it‚ or she can take the option and keep it until it is worth use. Let’s compare the situations : 1- She takes the cash bonus and decide to invest it in a 5-year bond which rate is 6‚02%. So
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To: Prof. Chalmers From: Travis Ramme and Meghan Smith Date: April 26th‚ 2007 Re: Ms. Chalmers’ Compensation Choices 1. Ignoring taxation and other constraints‚ Ms. Jameson is better off taking the options. The stock currently trading at $18.75 and the exercise price is $35. This may seem drastically far away. However‚ 5 year T-Bill rates are currently at 6.02%. Combined with a current stock volatility of approximately 42%‚ this allows each option to be valued at approximately $4.93.
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Wang E09-G11 Sally Jameson Case 1. How much is the option compensation package worth With the 5-year T-Bill yield‚ we can calculate the rf rate‚ compounded continuously‚ input for the BlackScholes model. e5r = 1 + (5-year T-Bill yield) e5r = 1.0602 r = 0.0117 Exercise price X 35 Given by case text Current stock price Volatility of stock returns Time to maturity S ơ Ƭ 18.75 43% 5 r 6.02% 1.17% Given by case text Approximation given by Exhibit 3 Given by case text‚ assumed that Sally will not
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parameters which would be input into an option pricing model. Which option pricing model is appropriate? • Sally is being offered 3‚000 options to purchase Telstar Communications shares at $35.000 on her fifth anniversary with the firm. In other words‚ Sally is being granted the right to‚ but not the obligation to‚ purchase these shares on (not before) her fifth anniversary with Telstar. Since Sally cannot exercise her options before five years with the firm‚ these are European options‚ which can be valued
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Sally Jameson: Valuing Stock Options in a Compensation Package By Group 10 1. If we ignore tax consideration and assume that Sally Jameson is free to sell her options at any time after she joins Telstar‚ which compensation package is worth more? First scenario‚ if Sally chooses stock options and hold until maturity date. Ignoring the taxation and other constraints‚ the future value of cash compensation at the end of the 5th year will be 5000 * (1 + 0.0602) ^ 5 = 6697.44. We can easily form the
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1. If we ignore tax considerations and assume that Sally is free to sell options at any time after her joins Telstar‚ which compensation package is worth more? If tax consideration is ignored and assume that Ms. Jameson is free to sell options at any time after her joins Telstar. First scenario If Ms. Jameson chooses stock options‚ she will hold until maturity date. Cash compensation at the end of the 5th year[1] = $5‚000(1+6.02%)^5 = $6‚697.44 To equal $6‚697.44‚ the stock price
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Clinical Diagnosis Homework Assignment #1 Diagnosis After theoretically discussing with Sally how she’s been feeling and conducting a clinical interview‚ my partners and I have come to the conclusion that Sally is exhibiting the symptoms of Body Dysmorphic Disorder (BDD) and Social Anxiety Disorder. Since her teenage years‚ Sally has been picking at her skin daily. The concern Sally has about her minor skin anomaly is one of the main symptoms of BDD. Impairment in her social and occupational areas
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Sally Soprano Case Study. The fundamental assumption is that learning and practicing negotiation skills can be learned. Others‚ however‚ assume that diplomacy and negotiation are things that can never be learned or taught. They believe that you are either born a negotiator or you are not. Unfortunately‚ this is a very shortsighted assumption. The approach to this will be to use all the information that was provided in the analysis to determine the best position of strategy to save the Opera on
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Case Study Analysis of Sally Sally is a young girl suffering from schizophrenia. Schizophrenia is a psychotic disorder‚ or a group of disorders represented by a severe impairment of individual thought process‚ and behavior (TheFreeDictionary‚ 2012). According to Meyer‚ Chapman‚ and Weaver (2009) “it may be more accurate to refer to schizophrenia as a family of disorders rather than a singular disorder.” (p. 90). Untreated patients suffering from schizophrenia are normally unable to filter various
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Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) Sally Jameson‚ a second-year MBA student at Harvard Business School‚ was thrilled but confused. It was late May 1992‚ graduation was approaching‚ and she had finally landed the job of her choice. She had just finished an early morning telephone conversation with Bob Marks‚ the MBA recruiting coordinator at Telstar Communications‚ a large‚ publicly held multinational company. Mr. Mark had offered Ms. Jameson a unique position
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