Discuss how the terms of the option will change

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What happens to an option's value when the company pays stock dividends? Consider a put option to sell 100 shares of a company for $45 per share. What happens to the put option ifthe company declares a 20% stock dividend? Discuss how the terms of the option will change, if it changes. If not, discuss how it affects the value of the option.

Reference no: EM132061237

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