All else being equal, the greater the dividend paid by a stock the: A. higher the call price and the lower the put price. B. lower the call price and the lower the put price. C. lower the call price and the higher the put price.
When dividend payments occur during the life of the option, the price of the underlying stock is reduced (on the ex-dividend date). All else being equal, the lower price reduces the value of call options and increases the value of put options.
