Question

Mel, Inc. stock is $135.00 per share. The company's semi-annual dividend is forecasted as $2.10 per share, indefinitely. What is the price of a zero-coupon equity-linked bond, promising to pay one share in 3 years, given annual interest rates of 5.0%?
A) $101.35
B) $110.26
C) $123.45
D) $155.22

Answer

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