You anticipate the receipt of money in 200 days, which you will use to purchase stocks in a particular company. The stock is currently selling for $51 and will pay a $0.5 dividend in 50 days and another $0.6 in 140 days.

The effective annual risk-free rate is 4%. You go long a forward contract on the stock.

a) At what price would you be willing to buy the stock in 200 days through a forward contract?

b)Suppose you agree to the contract at the price you found in the previous part. 60 days later, the stock has fallen to $46.71. What is the value of the forward contract?

c)On the expiration day, the stock price is $49.07. What is the value of the forward contract?