The options on the stock of the Pad have the following input values:

Stock price = RM55

Strike price = RM52

Risk-free rate = 0.10

Standard deviation = 0.33

Time to maturity = 0.4

(Assume that no dividends are currently being paid and use BSOPM model)

Assume that Pad is paying dividends at the rate of 4 percent per year. Determine the price of a call.

a.

RM5.85

b.

RM6.74

c.

RM6.35

d.

RM6.03