The current price of Estelle Corporation stock is

$30.00.

In each of the next two years, this stock price will either go up by

25%

or go down by

25%.

The stock pays no dividends. The one-year risk-free interest rate is

6.0%

and will remain constant. Using the Binomial Model, calculate the price of a one-year call option on Estelle stock with a strike price of

$30.00.

Question content area bottom

Part 1

The price of the one-year call option is

$enter your response here.

(Round to to the nearest cent.)