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3. What is the cost of five November 25 call option contracts on KNJ stock given the following price quotes?

KNJ (KNJ)	Underlying stock price: 30.86
		Call	Put
Expiration	Strike	Last	Last
Aug	25	6.15	.05
Nov	25	6.55	.10
Aug	35	.10	4.60
Nov	35	.70	5.10

A. $615 B. $655 C. $2,500 D. $3,075 E. $3,275

4. You purchased five TJH call option contracts with a strike price of $40 when the option was quoted at $1.30. The option expires today when the value of TJH stock is $41.90. Ignoring trading costs and taxes, what is your total profit or loss on your investment?

A. $60 B. $300 C. $360 D. $420 E. $540

5. The balance sheet for Levy Corp. is shown here in market value terms. There are 12,000 shares of stock outstanding.

	Market Value Balance Sheet
Cash	$55,000	Equity	$465,000
Fixed Assets	410,000
Total	$465,000	Total	$465,000

Share Repurchase Suppose Levy has announced it is going to repurchase $22,800 worth of stock. What effect will this transaction have on the equity of the firm? How many shares will be outstanding? What will the price per share be after the repurchase? Ignoring tax effects, show how the share repurchase is effectively the same as a cash dividend.

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