1. Consider the following data for an expansion project: S = present value of cash flows 45...
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1. Consider the following data for an expansion project: S = present value of cash flows 45 million, E = exercise price = cost of the project 50 million, 5 years, Standard deviation = 0.30, r = risk-free rate of return = 8 per cent. Using the Black-Scholes formula, calculate d,, d., M d.), N(d), and the value of the call option.
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