Question 2 A treasurer proposes to the CFO to use the Black-Scholes formula to value a real option. The CFO argues that since he wants to be conservative in the firm's project valuation rather than using the Black-Scholes formula as usual, the analysis should use the cost of capital of the firm as an input in the B-S formula rather than the risk- free rate." Without questioning whether it makes sense to be conservative in project valuation (.e., just take that as a reasonable objective in this instance), please explain whether or not the modified use of the Black-Scholes formula will lead to a conservative valuation of the real option