Suppose that a stock pay a $5 dividend at time t. The dividend is announced at time
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Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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The exdividend price at time t should be 100 5 95 If it were not the case profithungry tra...View the full answer
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Related Book For 
An Introduction to Derivative Securities Financial Markets and Risk Management
ISBN: 978-0393913071
1st edition
Authors: Robert A. Jarrow, Arkadev Chatterjee
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