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QUESTION 7 Suppose that a company is trying to value their employee stock options. The option have a strike price of $65. The stock is

QUESTION 7

Suppose that a company is trying to value their employee stock options. The option have a strike price of $65. The stock is currently trading for $62.50. The volatility is 35.33%. The risk free rate is 1%. What is the value using a time frame of four years? Everything remains the same except they estimate the dividend yield to be 2.25%.

A.

$7.98
B.

$13.97
C.

$18.76
D.

$21.64

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