Question
The current price of Estelle Corporation stock is $ 21.00 $21.00. In each of the next...
The current price of Estelle Corporation stock is $ 21.00 $21.00. In each of the next two years, this stock price will either go up by 20 % 20% or go down by 20 % 20%. The stock pays no dividends. The one-year risk-free interest rate is 8.0 % 8.0% and will remain constant. Using the Binomial Model, calculate the price of a one-year call option on Estelle stock with a strike price of $ 21.00 $21.00. The price of the one-year call option is $ nothing . (Round to to the nearest cent.)
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