14. Recalculate the value of the Buffelhead call option (see Problem 12), assuming that the option is

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14. Recalculate the value of the Buffelhead call option (see Problem 12), assuming that the option is American and that at the end of the first six months the company pays a dividend of $25. (Thus the price at the end of the year is either double or half the ex -dividend price in month 6.) How would your answer change if the option were European?

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Principles Of Corporate Finance

ISBN: 9780071314176

10th Global Edition

Authors: Richard Brealey

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