Question
The stock of Harford Inc. is about to pay a $0.32 dividend. It will pay no more dividends for the next month. Consider call options
The stock of Harford Inc. is about to pay a $0.32 dividend. It will pay no more dividends for the next month. Consider call options that expire in one month. If the interest rate is 5 %APR (monthly compounding), what is the maximum strike price where it could be possible that early exercise of the call option is optimal?
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Theoretical Foundations For Quantitative Finance
Authors: Luca Spadafora, Gennady P Berman
1st Edition
9813202475, 978-9813202474
