Value of the buffelhead call option


Recalculate the value of the Buffelhead call option, assuming that the option is American and that at the end of the first six months the company pays a dividend of $25. (Thus the price at the end of the year is either double or half the ex-dividend price in month 6.) How would your answer change if the option were European?

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Finance Basics: Value of the buffelhead call option
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