A stock is currently selling for $30 and will pay a dividend of $5 in 5 months' time. An American call option on this stock has an exercise price of $25 and expires in 6 months. The continuously compounded interest rate is 10% p.a., and the annualized stock return standard deviation is 30%. Use the Binomial Option Pricing model with the life of the option divided into two 3-month periods. Required: a. Compute the two-period binomial option price of the American call option. (13 marks) b. Calculate the value of the right of early exercise in the American call option above. A stock is currently selling for $30 and will pay a dividend of $5 in 5 months' time. An American call option on this stock has an exercise price of $25 and expires in 6 months. The continuously compounded interest rate is 10% p.a., and the annualized stock return standard deviation is 30%. Use the Binomial Option Pricing model with the life of the option divided into two 3-month periods. Required: a. Compute the two-period binomial option price of the American call option. (13 marks) b. Calculate the value of the right of early exercise in the American call option above