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Question
Use a binomial tree to value to following option. Assume rf = 0.045, rp = 0.14, σ = 0.20, E(CF1) = $62 million, g = 0.03, time horizon = 2 years, binomial period = 1 year, andcost = $500 million. What is the value of this project option?
A) $47 million
B) $57 million
C) $67 million
D) $77 million
Answer
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Related questions
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