Higher dividend payout policies have a __________ impact on the value of the call and a __________ impact on the value of the put.
A) negative,negative
B) positive,positive
C) positive,negative
D) negative,positive
E) zero,zero

Question

Quizplus · Accepted Answer

Higher dividend payout policies lead to a reduction in the underlying stock price, which results in a decrease in the value of the call and an increase in the value of the put. Therefore, higher dividend payout policies have a negative impact on the value of the call and a positive impact on the value of the put.

Higher Dividend Payout Policies Have a __________ Impact on the Value