Suppose a stock is trading at 100, and will pay its quarterly dividend of $3 in two

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Suppose a stock is trading at 100, and will pay its quarterly dividend of $3 in two months. Two-month and five-month zero coupon bonds are trading at 0.99 and 0.98 per dollar of face, respectively.

How much is a forward contract to buy the stock in five months at a delivery price of 100 worth today?

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Personal Finance

ISBN: 978-1133595830

12th edition

Authors: Thomas Garman, Raymond Forgue

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Posted Date: Sep 19, 2023 04:58 AM

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Suppose a stock is trading at 100, and will pay its quarterly dividend of $3 in two

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