Solved: Suppose a companys 50 stock pays an 8 continuous dividend, Mathematics

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Suppose a companys 50 stock pays an 8 continuous dividend

Forwards and Futures

1. 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

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Mathematics: Suppose a companys 50 stock pays an 8 continuous dividend

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Solution Preview :

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Mathematics: Suppose a companys 50 stock pays an 8 continuous dividend

Reference No:- TGS01564285

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