7.13 Call Early Exercise on Non-Dividend Paying Stock From earlier we know that c>S 0 Xe-IT Given that c> c C Do- Xe-rT7So-X Thus, C> So-X, but if exercised early CE S 0 Ⅹ Hence. no reason to exercise early Options, Futures, and Other Derivatives, 4th edition@ 2000 by John C. Hull Tang Yincai, Shanghai Normal UniversityOptions, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, Shanghai Normal University 7.13 Call Early Exercise on Non-Dividend Paying Stock • From earlier we know that c > S0 - Xe -rT • Given that C  c • C > S0 - Xe -rT > S0 - X • Thus, C > S0 - X, but if exercised early C = S0 - X • Hence, no reason to exercise early