Pixar stock is expected to pay a single $2.5 dividend in 3.0 months. Suppose you enter into a 6.0 month forward contract to buy one share of Pixar stock when the share price is $42.1 per and the risk-free interest rate is 9.25 percent continuously compounded. What the forward price?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Pixar stock is expected to pay a single $2.5 dividend in 3.0 months. Suppose you enter
into a 6.0 month forward contract to buy one share of Pixar stock when the share price is
$42.1 per and the risk-free interest rate is 9.25 percent continuously compounded. What
the forward price?
Transcribed Image Text:Pixar stock is expected to pay a single $2.5 dividend in 3.0 months. Suppose you enter into a 6.0 month forward contract to buy one share of Pixar stock when the share price is $42.1 per and the risk-free interest rate is 9.25 percent continuously compounded. What the forward price?
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