The put-call parity condition is altered when dividends are paid. The dividend-adjusted put-call parity formula is: S × e–dt + P = E × e–Rt + C where d is again the continuously compounded dividend yield. a. What effect do you think the dividend yield will have on the price of a put option? Explain. b. From Problem 23, what is the price of a put option with the same strike and time to expiration as the call option?
