Shares in NoPay Corp are currently trading at $250. The company is about to pay a dividend of $25 a share and the share price will then decline to $225. Over the subsequent quarter, the share price will either rise by 40% or decline by 10%. Note that the share price will go up or down only once over the coming quarter. The continuously compounded risk-free rate is 30% per annum. Consider a three-month European put option on a share of NoPay Corp with an exercise price of $260. (a) What are the two possible values of a NoPay Corp share at the end of the quarter? (b) What positions in NoPay Corp stock and bonds will replicate the payoff to this put and what is the cost of the replicating portfolio? (c) Check your valuation using the risk-neutral pricing technique. (d) What would be the price of the put if it were an American-style option? Shares in NoPay Corp are currently trading at $250. The company is about to pay a dividend of $25 a share and the share price will then decline to $225. Over the subsequent quarter, the share price will either rise by 40% or decline by 10%. Note that the share price will go up or down only once over the coming quarter. The continuously compounded risk-free rate is 30% per annum. Consider a three-month European put option on a share of NoPay Corp with an exercise price of $260. (a) What are the two possible values of a NoPay Corp share at the end of the quarter? (b) What positions in NoPay Corp stock and bonds will replicate the payoff to this put and what is the cost of the replicating portfolio? (c) Check your valuation using the risk-neutral pricing technique. (d) What would be the price of the put if it were an American-style option