The Call Option on a Dividend-Paying Stock Compared to a Comparable

Multiple Choice

The call option on a dividend-paying stock compared to a comparable non-dividend paying stock is:

A) more valuable because of the dividend payments.
B) equal in value.
C) less valuable because cash dividends lower the stock price.
D) equal to the cost of the non-dividend paying stock option.
E) either equal to or greater than the value of the non-dividend paying stock option.