Binomial Pricing: You Own a Share of Common Stock in ABC

Binomial pricing: You own a share of common stock in ABC, Inc., which is currently trading for $18 and will either rise to $30 or fall to $12 in one year. The risk-free rate for one year is 0 percent. You also own an American put option on the stock with a strike price of $20, which expires in one year. What is the value of the put option, and what would be the net payoff from exercising the option now?

A) Option Value: $3.33 - Net Payoff $2
B) Option Value: $3.33 - Net Payoff $6
C) Option Value: $5.33 - Net Payoff $2
D) Option Value: $5.33 - Net Payoff $6