mp3bu

I think its pretty stupid, surely having the option to excercise early would be valuable with or without a dividend yield, even for pure liquidity reasons.

But I think the idea was that you could call it before the stock goes ex-dividend, and the price falls

wilslm

The idea is that you could exercise early with the American Option and reinvest the dollars. Because there is no cash flow you cannot do this.

Analyze_This

CFAI Vol 6 page 177. They relate this tough concept to renewing a subscription before the original one runs out. Not only to you lose the interest on the money, you lose the choice.