Price of a put option with the same exercise price, Accounting Basics

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Price of a put option with the same exercise price

Problem:

A call option is currently selling for $4.30. It has a strike price of $105 and four months to maturity. The current stock price is $107, and the risk-free rate is 2.8 percent. The stock will pay a dividend of $1.95 in two months.

Required:

Question 1: What is the price of a put option with the same exercise price?

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Accounting Basics: Price of a put option with the same exercise price

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Accounting Basics: Price of a put option with the same exercise price

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