[Ali]

I got that Pe will be the exercise price. Which is $15m in Furlion but the Pa which spose to be the PV of the cashflow which is 0. But the model answer took $15m × 0.712= ……..
So my question is why does he take PV of exercise price rather taking Pa= 0?(NPV)
(In model answer Pa= $15m ×0712= $10.68)
Or we can take any of these?

[Ali]

Thank you very much sir, the study guide is really helpful.

[Author]

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