Question
A stock is expected to pay a dividend of $3 per share in 2 months and in 5 months. The current price of the
A stock is expected to pay a dividend of $3 per share in 2 months and in 5 months. The current price of the stock is $100. The risk-free rate is 6%. You have a short position in a 6-month forward contract. (i) (ii) Find the current forward price. What is the value of this forward contract? What is the value of this forward contract four month later if the stock price is $90?
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Fundamentals of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
1st canadian edition
978-0133400694
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