The value of an option can be calculated by using a step-by-step approach in the case of single periods or by using sophisticated formulas that can be easily created through a spreadsheet. In the real world, two possible outcomes for a stock price in six months is an assumption. The stock markets are volatile, and stocks move up and down based on market- and firm-specific factors Shares of Solar-systems Inc., a manufacturer of solar panels, sells for $40.00. Existing options allow for the option holder to purchase one additional share at an exercise price of $30.00. (Assume that the you get the option for free!) The option will expire within one year. We can assume that at that time there will be a 70% chance that Solar's shares will sell for $56.00 and a 30% chance that the shares will be selling at $28.00. Using the steps to the binomial approach, determine the following: Based on the binomial approach, the range of payoff values at expiration for Canada Tel Inc.'s shares and options is $18.00 (share) and $15.00 (option) $28.00 (share) and $26.00 (option) $20.00 (share) and $30.00 (option) $25.00 (share) and $20.00 (option) Given this information it is possible to create a riskless portfolio by selling one option and purchasing ________ shares Assuming that the risk-free rate is 8% and is compounded daily, the equilibrium price of the call option is ___________