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The current price of LC Corporation stock is $40. In each of the next two years, this stock price can either go up by $15.00
The current price of LC Corporation stock is $40. In each of the next two years, this stock price can either go up by $15.00 or go down by $15.00. LC stock pays no dividends. The one-year risk-free interest rate is 15% and will remain constant. Using the binomial pricing model, calculate the price of a two-year American put option on LC stock with a strike price of $40
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077400163
