Principles of Corporate Finance

50.78 = price

10.78 = intrinsic value

40.37

.37

32.10

0

25.52

0

45.28

5.60

36

28.62

40.37

(^36) 32.10
[(Ou ×Pu)+(Ud × Pd)]×(e−r∆t)
The greater of
Binomial Pricing