Briefly discuss why the true volatility that should be used


1. What is true volatility?

2. Briefly discuss why the true volatility that should be used in the Black-Scholes formula might differ from the historical volatility.

3. Sb Mills is expected to pay an annual dividend of $1.50 a share next year. The market price of th... Sb Mills is expected to pay an annual dividend of $1.50 a share next year. The market price of the stock is $32.50 and the growth rate is a 0.5% what is the firm's cost of equity?

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Financial Management: Briefly discuss why the true volatility that should be used
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