When using the Black-Scholes-Merton method for option valuation which takes into account dividends, does the dividend only get included into the calculation of options whose lifetime straddles the dividend exdiv date?
For example today is 16Nov2015. Lets say stock xyz has an upcoming exdiv date on 16Jan2016. If im valuing an option whose expiration is in either November or December, do I include January's dividend into that calculation because they expire before the exdiv date.
Or do I only include options whose expiration is after the exdiv date?
Or do I simply always include the stocks current dividend yield into the calculation,...regardless of whether the options expiration falls before or after the next exdiv?