Why does the payment of dividends usually render the binomial tree into a nonrecombining one? What type

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Why does the payment of dividends usually render the binomial tree into a nonrecombining one? What type of dividends causes the failure of recombination? What type of dividends does not?

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Derivatives Principles And Practice

ISBN: 9780078034732

2nd Edition

Authors: Rangarajan Sundaram

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Question Posted: Jan 10, 2024 01:00 AM

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Why does the payment of dividends usually render the binomial tree into a nonrecombining one? What type

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Cash dividends cause the binomial tree to be nonrecombining For example let S be the ini...View the full answer

Derivatives Principles And Practice

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