Assume that the stock in Problem 13.26 is due to go ex-dividend in 1.5 months. The expected

Question:

Assume that the stock in Problem 13.26 is due to go ex-dividend in 1.5 months. The expected is 50 cents.
a. What is the price of the option if it is a European call?
b. What is the price of the option if it is a European put?
c. Use the results in the Appendix to this chapter to determine whether there are any circumstances under which the option is exercised early. Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...