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hello sir, i wanted to know whether the black scholes model can be used to value equity of a company that is being acquired and therefore can it be another method apart from P/E ratio etc to value a company
Yes – it can be used to value equity (although the examiner will specify if he wants this approach) 🙂
Hi John,
I am having trouble with this equation. I have a big weakness when it comes to these equations as I am always unsure of brackets and the order of input into the calculator.
0.6664 * 23.13 – 0.4443 * 24 * E(2.71828) ^ – 0.06 * 2
I get 4.67, however the Kaplan study text gets 5.95
Is this a mistake on Kaplan’s part?
Thank you
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