We cover the methdology of working backwards through the tree to price the option in multi-period binomial framework. Although not a prerequisite, viewers can look at the tutorial on risk neutral valuation in binomial model for understanding how to calculate risk neutral probability of stock price going up. In reality the company hardly changes its valuation on a day-to-day basis, but the stock price and its valuation change every second.
This shows the difficultly in reaching a consensus about present day price for any tradable asset, which leads to arbitrage opportunities.
American put option binomial tree example curriculum