(Answered) A non-dividend-paying stock has a price is 20 with

Finance

A non-dividend-paying stock has a price is $20 with volatility of 20%. The continuously compounded risk-free rate is 6%.

a) Use the Black-Sholes-Merton model to find the price of a 12-month European call option on the stock with a strike price of $20.

b) What would be the price of a 12-month American call option with the same strike price if the stock were expected to pay a $2 dividend in 4 months and another $2 dividend in 10 months?

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