A call option on 100 shares of Generous Dynamics stock has an exercise price $125.0 per share. GD declares a stock dividend of 18.0 percent. What happens to the exercise price and the number of shares underlying the option?
a. Nothing happens
b. Number of shares increases to 118.0 and the exercise price remains the same.
c. Number of shares increases to 118.0 and the exercise price is reduced to 105.93
d. Number of shares increases to 118.0 and the exercise price is reduced to 102.5