On January 1$t 2017 a share has a price of 15 and is expected to pay a dividend of 0.95 (a) in 1 year and 3% per annum with continuous compounding. What should be the price of a forward contract, written on this share, which matures immediately after the second coupon is paid and what is the initial value of the forward contract? further dividend of 1.00 in 2 years. The relevant risk-free interest rate is (40 marks) (b) Immediately after the first dividend payment the share is trading at 16.50. What will be the new forward price and the current value of the long forward position which was opened in January 2017? (40 marks) (c) Explain why the prices and valuations in parts (a) and (b) must hold. (20 marks)