at Mr. X buys an option from the broker Y and have to pay 2% transaction fee on the option. Mr. X follows Black & Scholes model to calculate option price. Will Mr. X include transaction fee in option pricing? Why or not? please solve without exc

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter8: Financial Options And Applications In Corporate Finance
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D6 Finance Suppose that Mr. X buys an option from the broker Y and have to pay 2% transaction fee on the option. Mr. X follows Black & Scholes model to calculate option price. Will Mr. X include transaction fee in option pricing? Why or not? please solve without excel.
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