In December 2007 a Call Option on Google Stock with a June

question 99

Essay

In December 2007 a call option on Google stock with a June 2008 expiration and an exercise price of $720 sold for $80.50.If you bought this call,and find that Google share is sold for $840 in June,what would be the proceeds and return from exercising the call?

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Definitions:

Shares Outstanding

The total number of shares of a corporation that are in the hands of the public, including shares held by institutional investors.

Tender Offer

A tender offer is a proposal by an individual or entity to purchase a significant percentage of a company's stock from its shareholders at a specific price, usually at a premium to the market price.

Antitrust Laws

Legislation enacted to prevent monopolies and promote competition among businesses.

Horizontal Mergers

Mergers between companies that operate in the same industry, often aimed at creating synergies, reducing competition, or achieving economies of scale.