Use the Following Information to Answer the Question(s)below

question 4

Multiple Choice

Use the following information to answer the question(s) below.
(Please use a copy of the Cumulative Probabilities for the standard normal distribution for these problems. )
Taggart Transcontinental's stock has a volatility of 25% and a current stock price of $40 per share.Taggart pays no dividends.The risk-free interest rate is 4%.
-The Black-Scholes value of a one-year,at-the-money put option on Taggart stock is closest to:

• A)$1.45.
• B)$3.15.
• C)$4.75.
• D)$9.50.

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Definitions:

Sole Proprietorship

A business structure where a single individual owns, manages, and is responsible for all aspects of the business, including its debts.

Closed Receivership

A legal process where a receiver is appointed to manage the affairs, assets, and liabilities of a distressed or insolvent company until a resolution is found.

Controller

A senior financial officer responsible for overseeing an organization's daily accounting operations.

Capital Expenditures

Capital employed by a business to buy, enhance, and keep up physical properties, including premises, manufacturing facilities, or devices.