(Solution) - Refer to the information in E 8 24 If those holding -(2025 Original AI-Free Solution)

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Refer to the information in E 8-24. If those holding stock options can purchase a share of stock for $48 and the market value of a share of stock on January 1, 2012, is $50, how can the option to purchase the share be worth $11? What factors would cause the option to be worth more than $2 ($50 ? $48)? Remember, the options cannot be exercised until the end of the year.