Use a 2-step binomial tree to price an american call option, Business Economics

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Use a 2-step binomial tree to price an american call option

Use a 2-step binomial tree to price an American Call Option written on a stock with a volatility of 20% and a stock price of $50/share. The option expires in exactly one year and has a strike price equal to $35/share. A dividend of $1/share is expected in 6 months. The annual risk free rate 2%. Please describe your calculations in detail.

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Business Economics: Use a 2-step binomial tree to price an american call option

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