Compared to the value of a call option on a stock with no dividends, a call option on an identical stock expected to pay a dividend during the term of the option will have a:
A)higher value only if it is an American style option.
B)lower value only if it is an American style option
.C)lower value in all cases.
Can someone explain how C is correct? My logic of thinking must be wrong. I was thinking if a stock pays a dividend that will lower the price of the stock and the difference between the call price and the current stock price increases so I thought it would be higher if you can exercise early.