Question: A 3-year forward contract on Mathcorp shares is to be issued. The current share price is 4.50 and the last dividend which was paid

A 3-year forward contract on Mathcorp shares is to be issued. The

A 3-year forward contract on Mathcorp shares is to be issued. The current share price is 4.50 and the last dividend which was paid was 0.20. It is assumed that dividends will be paid every quarter year to shareholders and are increasing at a rate of 1% per quarter in the first two years and by 1.5% per quarter in the final year. Assuming a continuously compounded risk-free rate of 5% p.a., calculate the forward price.

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