Question
Q: Stock price today is $20 per share. The stock pays a $1 dividend in 3 months. The riskless interest rate is 5% per year.
Q: Stock price today is $20 per share. The stock pays a $1 dividend in 3 months. The riskless interest rate is 5% per year. The $20 stock price today is too high to represent a fair present value to the forward-contract parties. Determine what the fair present value would be
The answer should be below $20. Please show all the work! thank you
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The Investment Writing Handbook
Authors: Assaf Kedem
1st Edition
1119356725, 978-1119356721
