Text Box: This page was created by Daniel Chai, University of Waikato Management School

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Binomial Option calculator with single discrete dividend 

In some situation, the most realistic assumption is that the dollar amount of the dividend payout during the life of the option. In this case, the nodes of the Binomial tree do not link up, and the number of branches increases dramatically at the dividend payout date. 

This calculator accepts a single dividend payout with known dividend payout date. It can either calculate American or European style option with single dividend payout. Notice the input of dividend amount in the calculator is accepted in dollars, and the ex-dividend date is when the dividend will be payout. 

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European option          American option
Input parameters Result
Stock price (S) $ Call price (C) $
Strike price (X) $ Put Price (P) $
Years to maturity (T) Year
Risk free rate (R) %
Volatility (V) %
Dividend amount (D) $
Ex-dividend date (DT) Year
Number of steps Steps

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