Question

A stock's current price is 209 and it has declared dividends of $0.8/share each to be...

A stock's current price is 209 and it has declared dividends of $0.8/share each to be paid in 38 days, 158 days, and 278 days from now. You are purchasing a 300-day forward contract. (Assume that the risk free rate is 2%.)

What is the value of this forward contract 200 days after initiation, if the stock's price at that time is 205?

Provide the value of the contract rounded to two decimals.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assume that you own a dividend-paying stock currently worth $150. You plan to sell the stock...
Assume that you own a dividend-paying stock currently worth $150. You plan to sell the stock in 250 days. In order to hedge against a possible price decline, you wish to take a short position in a forward contract that expires in 250 days. The risk-free rate is 5.25% per annum (discretely compounding). Over the next 250 days, the stock will pay dividends according to the following schedule: Days to Next Dividend Dividends per Share ($) 30 1.25 120 1.25...
Rebecca is interested in purchasing a share in SpaceY, a hot new startup. SpaceY has a...
Rebecca is interested in purchasing a share in SpaceY, a hot new startup. SpaceY has a debt of $98.00M maturing in 86 days. Current asset value is $120.76M and fluctuates by 42% per year. The risk-free rate is 6.44%. Assuming a 360-day year, use Black-Scholes formula, to compute the price of 1 share of the call. Space Y has 2 million shares outstanding
Hero Manufacturing has 8.5 million shares of common stock outstanding. The current share price is $77...
Hero Manufacturing has 8.5 million shares of common stock outstanding. The current share price is $77 and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6.6 percent and sells for 108.5 percent of par. The second issue has a face value of $55.3 million, a coupon rate of 7.8 percent and sells for 112.3 percent of par. The...
9 Hero Manufacturing has 9.1 million shares of common stock outstanding. The current share price is...
9 Hero Manufacturing has 9.1 million shares of common stock outstanding. The current share price is $71 and the book value per share is $4. The company also has two bond issues outstanding. The first bond issue has a face value of $75 million, a coupon rate of 6.5 percent and sells for 109.7 percent of par. The second issue has a face value of $62.8 million, a coupon rate of 8.4 percent and sells for 113.5 percent of par....
Hero Manufacturing has 9 million shares of common stock outstanding. The current share price is $72...
Hero Manufacturing has 9 million shares of common stock outstanding. The current share price is $72 and the book value per share is $3. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6.4 percent and sells for 109.5 percent of par. The second issue has a face value of $57.8 million, a coupon rate of 8.3 percent and sells for 113.3 percent of par. The...
Hero Manufacturing has 9.3 million shares of common stock outstanding. The current share price is $69...
Hero Manufacturing has 9.3 million shares of common stock outstanding. The current share price is $69 and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $85 million, a coupon rate of 6.7 percent and sells for 110.1 percent of par. The second issue has a face value of $72.8 million, a coupon rate of 8.6 percent and sells for 113.9 percent of par. The...
Hero Manufacturing has 8 million shares of common stock outstanding. The current share price is $82...
Hero Manufacturing has 8 million shares of common stock outstanding. The current share price is $82 and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6.8 percent and sells for 107.5 percent of par. The second issue has a face value of $50.8 million, a coupon rate of 7.3 percent and sells for 111.3 percent of par. The...
Stock-A has current price, SA = $90 and stock-B has current price, SB = $80. Put...
Stock-A has current price, SA = $90 and stock-B has current price, SB = $80. Put options on A and B have 30 (trading) days to maturity and are currently both at-the money. The risk-free rate is r = 2% pa (continuously compounded). You do not have closed form solutions (e.g. Black-Scholes) for these option prices but the portfolio deltas and gammas for long positions in these put options are change A= -400 Gamma A = 30 change B= -200...
Books Inc. is a publicly traded publishing company. It has a current stock price of $75...
Books Inc. is a publicly traded publishing company. It has a current stock price of $75 per share and an equity beta of 0.8. Books is consistently profitable and faces a marginal tax rate of 21%. It also maintains a target leverage ratio of 40%. Books’ debt is AAA-rated and can be considered essentially risk free. The risk free rate in the economy is 5% and the market premium is 4%. You may assume that the CAPM holds. Please use...
CONSIDER: In Period 1 (at the end of the period): Net Income = 300 Interest Expense...
CONSIDER: In Period 1 (at the end of the period): Net Income = 300 Interest Expense = 100 Depreciation = 40 Cap Ex = 43 Net Increases to Working Capital = 10 Cash Flow to Invested Capital = NI + D&A - Cap Inv + Interest Exp – Net Add to Work Cap CFIC = 300 + 40 – 43 + 100 – 10 CFIC = 387 NOW CONSIDER: CF1 = 387 CF2 = 1.333 x CF1 = 515.871 CF3...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT