Problem 10.14.

The price of a European call that expires in six months and has a strike price of $30 is $2. The underlying stock price is $29, and a dividend of $0.50 is expected in two months and again in five months. The term structure is flat, with all risk-free interest rates being 10%. What is the price of a European put option that expires in six months and has a strike price of $30?

To solve this problem please use put-call parity with dividends:

c+Ke^-rt = p+ S0

Where D is the PV of dividends.