In the case of dividends, the modified formula can be derived in similar manner to above, but with the modification that one portfolio consists of going long a call, going short a put, and "D(T)" bonds that each pay 1 dollar at maturity "T" (the bonds will be worth "D(t)" at time "t"); the other portfolio is the same as before - long one share of stock, short "K" bonds that each pay 1 dollar at "T". The difference is that at time "T", the stock is not only worth "S(T)" but has paid out "D(T)" in dividends.