A company's board is deciding whether to grant the company's current CEO an option to buy one million shares of the company's stock at the price of $18 per share. The company's stock is currently trading at $20 per share. The option will expire in six years and the owner of the option can have the flexibility to exercise the option anytime up until (and including) the option's expiration. This option is not transferrable. Assuming that the risk-free interest rate is 1.5% per annum. a) If the annualized volatility of this company's stock price is 20% and the public expects the company to pay one dividend of $5 per share in 5 years time from now and another dividend of $3 per share 7 years from now. What is the current value of this option? (12 marks) A company's board is deciding whether to grant the company's current CEO an option to buy one million shares of the company's stock at the price of $18 per share. The company's stock is currently trading at $20 per share. The option will expire in six years and the owner of the option can have the flexibility to exercise the option anytime up until (and including) the option's expiration. This option is not transferrable. Assuming that the risk-free interest rate is 1.5% per annum. a) If the annualized volatility of this company's stock price is 20% and the public expects the company to pay one dividend of $5 per share in 5 years time from now and another dividend of $3 per share 7 years from now. What is the current value of this option? (12 marks)