Explain why a U.S. option on a stock that pays a continuous dividend yield is always worth
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Question:
Explain why a U.S. option on a stock that pays a continuous dividend yield is always worth as much as its intrinsic value. Give a numerical example of a situation in which the European option is worth less than the intrinsic value. (Indicate the numerical value of the stock price, strike price, time to expiration, etc.)
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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