What is the prepaid forward price for a 6-month prepaid

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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

(c) $36.98

(d) $37.00

(e) None of the above.

Reference no: EM13574203

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