Suppose a companyrsquos 50 stock pays an 8 continuous, Ask an Expert

Economics

Suppose a company’s $50 stock pays an 8% continuous dividend and the continuously compounded risk-free rate is 6%. Calculate the following:

a. the price of a prepaid forward contract that expires 1 year from now

b. the price of a forward contract that expires 1 year from now

(Hint: You will need a scientific calculator.)

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91673751

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