1. Six months ago, Monkey, Inc. repurchased $37,000 of its common stock. The company pays regular dividends totaling $23,000 last year. What is the amount of the cash flow to stockholders for the past year if no additional shares were issued?
2. A stock pays $5 dividend one period from now. Build a two-period non-recombining binomial tree with the following parameters: S=40, u=1.15, d=0.9, r=3%.
a) Price both a European and American call option. Explain the difference, if any.