Let S = $52, s = 20%, and r = 7% (continuously compounded). The stock is...

Let S = $52, s = 20%, and r = 7% (continuously compounded). The stock is set to pay a single dividend of $1.10 nine months from today, with no further dividends expected this year. Use the Black-Scholes model (adjusted for the dividend) to compute the value of a one-year $50-strike European call option on the stock.

Answer = $6.43 Please solve and show all work. Thanks

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FORMULAS ARE GIVEN. CELL REFERENCES ARE ALSO GIVEN. SO MANUALLY AND USING EXCEL, BOTH WAYS, WE CAN GET SOLUTION.

jeff jeffy answered 6 months ago

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