a) Identify and explain the five variables that go into the black- Scholes option pricing model and explain how movements in these variables affect the price of a put option. b) Acompany is condering a project. it has only 10% debt in its capital structure with a pre- tax cost of 8%. it has a beta of 1.4; the risk free rate is 5% and the equity risk premium is 6.5%. This would require an investment of $700,000. at the end of year 5 and this would produce a stream of cash flows with a present value of $650,000 at the end year 5. The volatility of the cash flows is 35%. The company considered this project to be a real option. a) Find the value of this real ( call ) option. b) Using the put- call parity, find the value of the put option.