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Find prepaid forward price for prepaid forward contract

KMW, Inc. plans to pay a dividend of $0.50 per share both 3 and 6 months from today. KMWs share price today is $36.00 and the continuously compounded interest rate is 6%. What is the prepaid forward price for a 6-month prepaid forward contract, which expires immediately after the second dividend?

(a) $35.00

(b) $35.02

(d) $37.00

(e) None of the above.

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find prepaid forward price for prepaid forward contract

Reference No:- TGS0679045

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find prepaid forward price for prepaid forward contract

Reference No:- TGS0679045

Recent Questions Asked Finance Basics

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