You have been granted stock options on 450 shares of your employer's stock. The stock is currently selling for $26.60 and has a standard deviation of 25 percent. The option's strike price is $25 and the time to maturity is 8 years. The risk-free rate of 2.4 percent? Assume that no dividends are paid.

A. How will the market react to your exercising your options and how will the share count of the company change if you exercise your option?

B. If a $2 per share dividend is declared how will this advantage you?

C. What is the value of each option? What is the total value of your options?