A firm has stock outstanding with a current price of 25 per, Financial Management

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A firm has stock outstanding with a current price of 25 per

A firm has stock outstanding with a current price of $25 per share. The price in one period is expected to be either $30 or $35. A call option on ONE share is available with an exercise price of $20. If the risk-free rate of interest is 5%, what would you pay for the call option?

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Financial Management: A firm has stock outstanding with a current price of 25 per

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Financial Management: A firm has stock outstanding with a current price of 25 per

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