Question
A $66 stock pays a dividend of $1.40 every 3 months, with the first dividend coming 3 months from today. The continuously compounded risk-free rate
A $66 stock pays a dividend of $1.40 every 3 months, with the first dividend coming 3 months from today. The continuously compounded risk-free rate is 6%. What is the price of a prepaid forward contract that expires 6 months from today, immediately after the second dividend?
a. $65.19
b. $64.62
c. $63.26
d. $63.20
e. $63.37
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Contemporary Issues In Development Finance
Authors: Joshua Yindenaba Abor, Robert Lensink, Charles Komla Delali Adjasi
1st Edition
1138324329, 978-1138324329
