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(b) (3 points) Compute the cash-flows/dividends to shareholders at nodes U, D, UU, UD, DU, and DD (CFs (U), CFs(D), CFs(UU), CFS(UD), CFs(DU), CFs(DD)) Solution:

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(b) (3 points) Compute the cash-flows/dividends to shareholders at nodes U, D, UU, UD, DU, and DD (CFs (U), CFs(D), CFs(UU), CFS(UD), CFs(DU), CFs(DD)) Solution: CFs(U) = 50 CFs(D) = 0 CFs(UU) = 2000 - 1070 = 930 CFs(UD) = 0 CFs(DU) = 0 CFs(DD) = 0

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