Principles of Corporate Finance

Example
ABC is selling at $41 a share. A six month May 40
Call is selling for $4.00. If a May $ .50 dividend is
expected and r=10%, what is the put price?

Put - Call Parity

Op = Oc + S - P - Carrying Cost + Div.

Op = 4 + 40 - 41 - (.10x 40 x .50) + .50

Op = 3 - 2 + .5

Op = $1.50