Use the Table for the Question(s)below

question 26

Essay

Use the table for the question(s)below.
Consider the following information on options from the CBOE for Merck:
-You have decided to sell (write)five January 2009 put options on Merck with an exercise price of $45 per share.How much money will you receive and are these contracts in or out of the money?

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Definitions:

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, typically expressed as a percentage.

Price/earnings Ratio

A valuation metric for companies, calculated as the market value per share divided by the earnings per share.

Excess Cash

Refers to the amount of cash held by a company that exceeds the normal operational needs, often indicating a potential for investment, distribution to shareholders, or acquisition.

Dividend

A part of a company's profits distributed to its shareholders, usually four times a year.