Use the Black-Scholes formula to find the value of a call option on Capybara stock. Show your work. Time to expiration = 1 year Standard deviation = 50% per year Exercise price = $115 Stock price = $100 Interest rate = 8% per year Dividend Yield = 2% per year Standard Deviation of stock’s rate of return = .5 (50% per year)
Books to use: Dyer, L. (2006). Critical Thinking for Business Students. Captus Press. (Chapter 2: Claims) Chandler, A. D. (1990). The Enduring Logic of
Books to use: Dyer, L. (2006). Critical Thinking for Business Students. Captus Press. (Chapter 2: Claims) Chandler, A. D. (1990). The Enduring Logic of Industrial Success. Harvard Business Review, 68(2), 130–140. Schumacher, E. F. (1973). Small is beautiful: A study of economics as if people mattered. London: Blond and Briggs.