Assume that there is no arbitrage in the market. A forward contract is available on one ton of a physical asset. The asset provides an income stream of $y per ton payable semiannually.

A payment has just been made. The maturity of the forward contract is T years (6 months < T < 1 year). Let St be the spot price of one ton of the asset at time t and let r be the continuously compounded risk-free rate of interest per annum which is assumed to be constant.

Derive the current forward price using the principle of no arbitrage.