The board of the pqs corporation has decided to give its employees 5 million of 4 year at the money call options on pqs stock. If the options are exercised, the company will issues new shares. There are 20 million pqs shares outstanding. Pqs stock price is currently $75 and its volatility is 30 percent. The risk free interest rate is 4 percent and the company does not pay dividends

A) what is the cost of the offer pqs

B) by how much will the share price of pqs drop when the options are exercised and the pqs stock is diluted