Question
Investor considers entering a 1Y forward contract for a delivery of 5 shares of company ABC which he currently holds. Current price of one share
Investor considers entering a 1Y forward contract for a delivery of 5 shares of company ABC which he currently holds. Current price of one share is 80 EUR. At the end of each 6M company ABC pays its shareholders 15 EUR of dividend per share. Additionally investor holding shares has to pay a brokerage acount fee in amount of 2 EUR per share at the end of each quarter. What should be the minimal price of one share expected under this contract, if the market zero rates per annum (continuous compunding) quoted currently are the following:
| Period | Zero-rates |
| 3M | 2,00% |
| 6M | 2,40% |
| 9M | 3,00% |
| 12M | 3,20% |
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Financial Heresy How To Grow Control And Protect Your Wealth With The Secret Strategies Your Financial Advisor Will Never Tell You About
Authors: Joseph T Brown
1st Edition
1081584459, 978-1081584450
