q24

Let S =$79,s = 29%, and r = 8% (Continuously compounded). The stock is set to pay a single dividend of $0.60 six months from today, with no further dividends expected

thr year. Use the Black Scholes model adiusted for dividend) to computethe value of a one year $75stike European put option on the stock. (The value of d1 is 0.57478)

a. $14.29

b. $13.87

c. $ 5.69

d. $4.68

e. $4.52