where to get interest rate?

In fact I am not sure if I should use Libor or other rate.

 

Shall I use Libor rate, or not?

Why shouldn't I use my cost of capital, especially if I do replication, and BS is derived using stock and bond...

 

Why not "end of quarter"?

 

Why should it be 1 month LIBOR?

 

so this implied method doesn't work?

 

No, it doesn't. The risk free rate is assumed to be constant in any theoretical model. The risk free rate effects the value of an option, but the market value of an option does not effect the risk free rate of interest. You can use LIBOR, but short term t-bills are probably better for options in the U.S. I've heard people use LIBOR, but your best bet is short term government securities. but the only time ho matters is if rates move a huge amount or with leaps where interest rates may change substantially over the life of the option

 

dividend

 

Do it on a european style. For instance XEO or OEX (one of the two is european).