The stock of Harford Inc. is about to pay a $0.22 dividend. It will pay no more

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The stock of Harford Inc. is about to pay a $0.22 dividend. It will pay no more dividends for the next month. Consider call options that expire in one month. If the interest rate is 5% APR (monthly compounding), what is the maximum strike price where it could be possible that early exercise of the call option is optimal?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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