Dividends when valuing forward contract on stock

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Reference no: EM131575399

With a flat yield curve, an analyst who mistakenly ignores the dividends when valuing a forward contract on a stock that pays cash dividends will most likely: A. overvalue the position by the more than the future value of dividends compounded out to contract expiration. B. undervalue the position by less than the present value of dividends discounted back to contract inception. C. overvalue the position by the future value of dividends compounded out to contract expiration.

Reference no: EM131575399

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