To calculate the 12-month futures price for Unico Delta stock, we use the formula for pricing equity futures, considering the current stock price, dividend yield, and the risk-free rate (LIBOR in this case):
#=#×#(###)#F=S×e(r#d)t
Where:
* #Fis the futures price
* #Sis the current stock price ($20)
* #ris the risk-free rate (3% or 0.03)
* #dis the dividend yield (5% or 0.05)
* #tis the time to maturity (1 year)
Plugging in the values:
#=20×#(0.03#0.05)×1F=20×e(0.03#0.05)×1#=20×##0.02F=20×e#0.02##20×0.9802F#20×0.9802##20.04F
#20.04
Therefore, the 12-month futures contract will trade at approximately $20.04.
References
* How Finance Works.pdf, p. 206