Blipton/ the share price for Black-sholes model

Q)Blipton’s board of directors is considering the introduction of an executive share option scheme.

The scheme would be offered to all middle managers of the company. It would replace the existing scheme of performance bonuses linked to the post-tax earnings per share of the company. Such bonuses in the last year ranged between $5,000 and $7,000. If the option scheme is introduced, new options are expected to be offered to the managers each year.

It is proposed for the first year that all middle managers are offered options to purchase 5,000 shares at a price of 500 cents per share, after the options have been held for one year. Assume that the tax authorities allow the exercise of such options after they have been held for one year. If the options are not exercised at that time they will lapse.

The company’s shares have just come ex-div and have a current market price of 610 cents. The dividend paid was 25 cents per share, a level that has remained constant for the last three years. Assume that dividends are only paid annually.
The company’s share price has experienced a standard deviation of 38% during the last year. The short-term risk-free interest rate is 6% annum.

Required:
Evaluate whether or not the proposed share option scheme is likely to be attractive to middle managers of Blipton.

Answer
A dividend payment is due during the option period. The share price, Pa, should therefore be reduced by the present value of this expected dividend. The dividend per share has remained constant for three years. It is assumed that it will be constant in the next year.
The present value of the dividend (discounted at the risk-free rate) is:
25 = 23.58 cents 1.06
The share price, Pa, is therefore estimated to be 610 – 23.58 = 586.42 cents.

****** My question is that I am not still sure why we have to get rid of the present value of the dividend. I thought normally the share price is MV of ex-div.

Thank you !!