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NEW QUESTION: 1
A stock has a spot price of $102. It is expected that it will pay a dividend of $2.20 per share in 6 months. What is the price of the stock 9 months forward? Assume zero coupon interest rates for 6 months to be 6%, for 9 months to be 7%, and 12 months to be 8% - all continuously compounded.
A. $94.76
B. 104.26
C. $105.25
D. $100
Answer: C
Explanation:
Explanation
The dividend payment has a present value of $2.20*e