If the Stock Makes a Dividend Payment Before the Expiration

Multiple Choice

If the stock makes a dividend payment before the expiration date, then the put-call parity relation is

A) Value of call = value of put + share price − present value (PV) of dividend − PV of exercise price.
B) Value of call = value of put − share price + PV of dividend − PV of exercise price.
C) Value of call = value of put + share price + PV of dividend + PV of exercise price.
D) Value of call = value of put + share price + PV of dividend − PV of exercise price.