Option Exercise Price =

Term =

Risk-Free Rate =

Dividend Yield =

Volatility =

Option Price =

D1 =

D2 =

D5 =

D6 =

Black-Scholes is a popular method for calculating option prices. This version includes the expected dividend yield.

- Option Exercise Price: Strike price of the options.

- Term: Time to expiration in years.

- Risk-Free Rate%: Risk-free interest rate expressed as a percentage.

- Dividend Yield%: expected dividend yield over the life of the options.

- Volatility%: Annual volatility of the stock price, average movement of the stock per day over the previous year, always expressed in absolute terms (-10% would be 10% movement).

- Option Value: Theoretical option value.

Formula contributed by Stephen Bryan. Template created by Infinity Softworks.

What is the option value of a $55.33 option set to expire in 5.5 years? The risk-free rate is 2.1%, the expected dividend yield is 1.8% and the volatility is 26%.

- Option Exercise Price: 55.33

- Term: 5.5 years

- Risk-Free Rate: 2.1%

- Dividend Yield: 1.8%

- Volatility: 26%

The option is valued at $12.32.

Option Exercise Price

Term

Risk-Free Rate

Dividend Yield

Volatility

Option Price

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black scholes

black-scholes

black sholes

black-sholes

blacksholes

blackscholes