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Stock XYZ is currently trading at $650. It will pay a dividend of $20 in 60 days, and that will be the only dividend over
Stock XYZ is currently trading at $650. It will pay a dividend of $20 in 60 days, and that will be the only dividend over the next 100 days. Let t and T denote today and the date 100 days from now, respectively. As stated, S(t) = $650. (a) Assuming an interest rate of 2%. Estimate today's forward price for XYZ to date T. We could denote this forward price by St(t). [b] Using the forward price (determined above) compute the implied dividend yield for XYZ over the time period [t, T). Stock XYZ is currently trading at $650. It will pay a dividend of $20 in 60 days, and that will be the only dividend over the next 100 days. Let t and T denote today and the date 100 days from now, respectively. As stated, S(t) = $650. (a) Assuming an interest rate of 2%. Estimate today's forward price for XYZ to date T. We could denote this forward price by St(t). [b] Using the forward price (determined above) compute the implied dividend yield for XYZ over the time period [t, T)
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