Continuing with the Tesla theme, suppose Tesla announces a special dividend to be paid 3 months from now of $20 per share (they won't but let's pretend for the sake of the question). Assuming the same other conditions as before, i.e. a stock price of $1,500 and an interest rate of 2% compounded continuously, what is the appropriate 1-year forward price for Tesla stock? Don't round your answer until the very end.

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To calculate the appropriate 1year forward price for Tesla stock given the announcement of a special ... View the full answer