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Walter Maxim

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Essay

Walter Maxim. the CWO of digitl storage Devices has been granted option on 300,000 shares. The stock is currently trading at $27 a share and the options are at the money. The volatility of the stock has been about .15 on an annual basis over the last several years. The options mature in 5 years, become exercisable in 3 years, and the risk free rate is 4%.
-What is the value of Mr.Maxim's options?


Definitions:

Propagation Step

A part of a chain reaction where intermediates react with the original reactants to produce more intermediates and products, continually propagating the reaction.

Propagation Steps

Sequences of reactions where reactive intermediates react to form products and new intermediates in a chain reaction mechanism.

Free-Radical Chlorination

A chemical reaction that involves the substitution of hydrogen atoms in alkanes with chlorine atoms via a free-radical mechanism.

Ethane

A colorless, odorless gas that is the simplest alkane, with the formula C2H6, used as a fuel.

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