Stock price of a is 80 now over each of the next, Ask an Expert

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Stock price of A is $80 now. Over each of the next three-month periods it is expected to go up by 10% or down by 7%. The stock has a quarterly dividend yield of 10%. If the riskfree rate is 5% p.a., what is the current value of a 6-month call option that can be exercised prior to maturity? Assume the option's exercise price is $70.

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Category:- Financial Management
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