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Boring Unreliable Gadget Inc.'s stock price S is $50 today. The company, however, reliably pays quarterly dividends to shareholders. For example, BUG paid $0.95 dividend
Boring Unreliable Gadget Inc.'s stock price S is $50 today. The company, however, reliably pays quarterly dividends to shareholders. For example, BUG paid $0.95 dividend one month back; it will pay $1 dividend two months from today, $1.05 after five months, $1.10 after eight months, and $1.15 after eleven months. If the continuously compounded interest rate is 4 percent per year, what is the forward price of a six-month forward contract on BUG
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