Answer to Question #64080 in Other Other for Ahmad
- Call option on NZD 1 million at exercise price of USD 0.6200/NZD: a 1.5% premium.
- Put option on NZD 1 million at exercise price of USD 0.6205/NZD: a 1% premium.
- WACC for Millennium is at 10%
Based on the information above, which option should the company choose? How much is the total cost to company if they used option market to hedge this transaction exposure. Assume the spot rate three months from now is USD 0.6300/NZD.
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!