1. Assume the stock of Best Buy (Ticker: BBY) pays no dividend and trades at $43 per share. Consider European puts and calls on BBY with T = 6 months. If the 6-month interest rate is 2%, at what K will the call and put prices be equal?
2. Douglas Gardens pays an annual dividend that is expected to increase by 3.6 percent per year. The stock commands a market rate of return of 12.6 percent and sells for $28.50 a share. What is the expected amount of the next dividend?