A stock is currently priced at $51.00 and pays a dividend yield of 4.3% per annum. The
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A stock is currently priced at $51.00 and pays a dividend yield of 4.3% per annum. The risk-free rate is 5.7% per annum with continuous compounding. In 12 months, the stock price will be either $41.31 or $57.12. Using the binomial tree model, compute the price of a 12 month European call with strike price $50.32.
Related Book For
Corporate Finance Core Principles and Applications
ISBN: 978-0077905200
3rd edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
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