You Have Been Granted Stock Options on 100 Shares of Your

question 27

Multiple Choice

You have been granted stock options on 100 shares of your employer's stock. The stock is currently selling for $50.63, has a dividend yield of 3.2%, and a standard deviation of 55%. The option's exercise price is $50 and the time to maturity is 15 years. What is the value of your options given a risk-free rate of 4.5%?

• A) $21.20
• B) $22.15
• C) $22.67
• D) $23.01
• E) $23.25

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