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John has a European call option with an exercise price of $110 that will expire in 3 years. The stock has a 40% chance of
John has a European call option with an exercise price of $110 that will expire in 3 years. The stock has a 40% chance of paying annual dividends in perpetuity of $5.25 beginning 4 years from now, a 30% chance of $7 annual dividends, and another 30% chance of paying $8.75yearly. With an effective annual rate of 7%, for how much could John sell this option today
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