All else equal, call option values are lower
A) in the month of May.
B) for low dividend-payout policies.
C) for high dividend-payout policies.
D) in the month of May and for low dividend-payout policies.
E) in the month of May and for high dividend-payout policies.

Question

Quizplus · Accepted Answer

Call option values are generally lower for stocks with high dividend-payout policies because when dividends are paid, the stock price typically decreases by the amount of the dividend, reducing the value of the call option.

All Else Equal, Call Option Values Are Lower