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You have an American call option on Johnnies Inc. Your option expires in 9 months and has a strike price of $15. Currently the stock
You have an American call option on Johnnies Inc. Your option expires in 9 months and has a strike price of $15. Currently the stock is selling for $20 and the risk-free rate for any period up until one year is 5.5% per annum with continuous compounding. A dividend will be paid in 6 months. What dividend amount will make you indifferent between exercising your American call option and not exercising your option?
A) $0.2048 B) $0.3414 C) $0.4069 D) $0.6062 E) None of the above are correct
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