A stock provides a dividend yield of 5.0% paid semi-annually (equivalent to 4.94% continuously compounded). The spot
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A stock provides a dividend yield of 5.0% paid semi-annually (equivalent to 4.94% continuously compounded). The spot price of the stock is currently $500, and the risk-free rate is 7.5% with continuous compounding.
What is the two-year forward price for a stock?
What is the continuously compounded cost of carry for the stock?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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