Suppose the stock price is 50 and the continuously, Ask an Expert

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Suppose the stock price is $50 and the continuously compounded interest rate is 10%. The stock pays dividends every 3 months, with the first dividend coming 3 months from today.

If the dividend payment is $2 each, what is the price of a 1-year prepaid forward price, immediately after 4^th quarter dividend? What is the price of a 1 -year forward contract?

If the 1 -year forward price is $45.50, what should be the dividend payment amount?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92056614

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