Rather than buying the stock of company A you decide to purchase the options instead you consider four options plays based on the following assumption: "Factory A offers $5.00 a share. Dividends are expected to grow at 6% per year and the current dividend is $1 per share. The expected rate of return is 20%. What should the current stock price be?"

Question 6: What type of option would I purchase to trade of the above assumption? (Call v Put & Short v. Long)

Question 7: Should you purchase a American or European Option?

Bonus/Extra Credit Question 8: If you were 100% Factory A's stock would achieve a 20% return what is the most aggressive strike price you would purchase?