Question
The stock of Harford Inc. is about to pay a $ dividend. It will pay no more dividends for the next month. Consider call options
The stock of Harford Inc. is about to pay a $ dividend. It will pay no more dividends for the next month. Consider call options that expire in one month. If the interest rate is APR (monthly compounding), what is the maximum strike price where it could be possible that early exercise of the call option is optimal?
The maximum strike price is $
(Round to the nearest dollar.)
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
