Use the Black-Scholes formula to find the value of a call option on the following stock:...

Use the Black-Scholes formula to find the value of a call option on the following stock:

Time to expiration = 6 months

Standard deviation = 50% per year

Exercise price = $50

Stock price = $50

Interest rate = 3%

The Black-Scholes Formula

Financial economists searched for years for a workable option-pricing model before Black and Scholes (1973) and Merton (1973) derived a formula for the value of a call option. Now widely used by options market participants, the Black-Scholes pricing formula for a European-style call option is