In its 10Q dated February 4, 2022, LLL. Incorporated, had outstanding employee stock options representing over 285 million shares of its stock. LLL accountants estimated the value of these options using the Black - Scholes - Merton formula and the following assumptions:S = current stock price = $28.89K = option strike price = $31.32r= risk-free interest rate = 0.057 = stock volatility = 0.29T= time to expiration = 3.5 yearsWhat was the estimated value of these employee stock options per share of stock? (Note: LLL pays no dividends.) Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter2: The Domestic And International Financial Marketplace
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In its 10Q dated February 4, 2022, LLL, Incorporated, had outstanding employee stock options representing over 285 million shares of its stock. LLL accountants estimated the value of these
options using the Black - Scholes - Merton formula and the following assumptions:S = current stock price = $28.89K = option strike price = $31.32r = risk-free interest rate = 0.057 =
stock volatility = 0.29T = time to expiration = 3.5 yearsWhat was the estimated value of these employee stock options per share of stock? (Note: LLL pays no dividends.) Note: Do not round
intermediate calculations. Round your answer to 2 decimal places.
Transcribed Image Text:In its 10Q dated February 4, 2022, LLL, Incorporated, had outstanding employee stock options representing over 285 million shares of its stock. LLL accountants estimated the value of these options using the Black - Scholes - Merton formula and the following assumptions:S = current stock price = $28.89K = option strike price = $31.32r = risk-free interest rate = 0.057 = stock volatility = 0.29T = time to expiration = 3.5 yearsWhat was the estimated value of these employee stock options per share of stock? (Note: LLL pays no dividends.) Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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