14) Discrete dividend payments Flashcards
(5 cards)
1
Q
What happens to the stock and option value when a discrete dividend is paid at time
A
2
Q
What condition must the option value satisfy across a discrete dividend payment
A
3
Q
How can we calculate the value of a European call option Cd(S,t) before a single discrete dividend
A
4
Q
What is the explicit pricing formula for a call option with one dividend payment
A
5
Q
How do multiple discrete dividends modify the stock price and option valuation
A
