You are given the following information about Stock XYZ: (i) The current price of the stock is
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You are given the following information about Stock XYZ:
(i) The current price of the stock is 35 per share.
(ii) The expected continuously compounded rate of return is 8%.
(iii) The stock pays semi-annual dividends of 0.32 per share, with the next dividend to be paid two months from now.
The continuously compounded risk-free interest rate is 4%.
Calculate the current one-year forward price for stock XYZ.
(A) 34.37
(B) 35.77
(C) 36.43
(D) 37.23
(E) 37.92
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