BoA [4]

In-the-money American call options written on BoA's common stock carry a strike price of of $55 and expire in 6 months. The annualized six-month risk free rate is 10%.

BoA's common stock will go "ex" dividend tomorrow. BoA will pay a $2 dividend.

Ms. Johnson holds an option and wonders whether to exercise it. She is worried, because she knows that BoA's stock price will drop tomorrow with $2, making it less likely that her call option will expire in the money. Explain to Ms. Johnson why she should not exercise.