You are holding a December European put option to sell 500 shares of a company with a strike price of $60. The option premium is $0.5 per 1 unit of share.

1. This morning, the company makes a 3-for-2 stock split, what is the effect on the terms of the put option contract in terms of the unit share price, the number of shares it hedges and the option premium per unit of share. (5 marks)
2. Based on the impact of the stock-split in part (a), what is that equivalent to if the company issues stock dividend instead? (4 marks)
3. If the market price of the shares goes to $38 and $62 at maturity (after the stock split in part a), what is the payoff and profit positions of the put option? (4 marks)