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When we calculate BSOP sometimes we have seen in the paper that “company will not pay any dividends in the coming few months/year”. What does it means and if company paid dividend what will be the impact of calculation?
Thanks in advance
If there are any dividends to be paid before the expiry of the option, then you subtract the present value of the dividends from the current share price (Pa), and then carry on as normal.
It only right for the financial option not real option, is it? that the underlying assets of the Options is share price
It is for share options. Dividends do not exist for all the other types of options.