The Black-Scholes formula applies to options on stocks that pay no dividends. Simple dividend adjustments may be
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The Black-Scholes formula applies to options on stocks that pay no dividends. Simple dividend adjustments may be adequate to price European calls, but the proper treatment of American calls on dividend-paying stocks, where early exercise becomes an issue, requires more complex formulas. p-69
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ISE Investments
ISBN: 9781266085963
13th International Edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus
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