When valuing a plain index option, there are two options in terms of index dividend:
(1) The underlying price is a spot price like in the FTSE 100 case (option is valued off the index): you can use continuous dividend yield. You can imply a dividend yield from a linearized call-put parity:
The present value of the dividend payment is
$PV(div)=P-C+(S-K)+K(e^{rt} - 1)$,
then the implied dividend yield is $d = \frac {PV(div)}{T*S}$
(2) The underlying instrument is a future contract on the index (for example, IBEX35 or TAIEX), you'd set index dividend yield to zero and use future price of corresponding maturity as an underlying price.
For the purposes of calculating option prices or implied volatilities, the use of a dividend forecasting model based on projected actual dividend growth rates can lead to an option model which is internally inconsistent. In contrast, the
use of a model based on constant dividend yields is not only consistent, but also easier to implement.