Question: Need help with this Finance question. Any help would be great! Thanks in advance! 3. You are an executive at WX Resorts and you have

 Need help with this Finance question. Any help would be great!

Need help with this Finance question. Any help would be great! Thanks in advance!

Thanks in advance! 3. You are an executive at WX Resorts and

3. You are an executive at WX Resorts and you have executive stock options as part of your compensation. You hold 1,000 options that expire six months from today at a strike price of 60 but that can be exercised early. WX is trading at $64 and just announced a $2 dividend per share that will be paid four months from today to stockholders Who own the stock three months from today. (a) Using a strike price of $60 and today's stock price of $64, what is the total value of your options using the Black-Scholes model if you hold European Options (assume 0' = .30, r = .01)? (Hint: the stock price will fall by the discounted value of the dividend). (b) If your options are American Options, What is the value today using Black's Approximation for dividend payments (assume 0' = .30, r = .01)? (c) Should you exercise early to receive the dividend? Explain

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