# Questions tagged [dividends]

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.

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### Pricing non-vanilla options on EuroStoxx50 dividend futures

Liquid vanilla EuroStoxx50 dividend futures options quoted on Eurex are calls or puts whose expiries are the same as the expiry of the underlying futures contract. Is there any "simple" ...
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### Why do we use the letter $q$ for dividends?

In derivative pricing models, we often use the letter $q$ to designate the dividend yield i.e.: $$\textrm{d}S_t=S_t((\mu-q) \textrm{d}t+\sigma\textrm{d}W_t)$$ for the price process $S$ of the stock. ...
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### Why do we need an ex-dividend date? [closed]

Why do we need an ex-dividend date? What is the problem with the ex-dividend date being the same as the payment date? Why are they separate? What problem does having a separate ex-dividend date solve? ...
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### Modeling the price of a stock based upon its dividend history

The value of a stock is the present value of all future dividends. This is sometimes called the Gordon Growth model. This model assumes that dividends increase at a constant rate. In the real world ...
1 vote
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### Spot/div correlation for autocalls

I cannot find much litterature on the effect of the spot/div correlation or the shape of the spot/div cross gamma concerning the autocallable structures. In a general way, could someone present an ...
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### Upcoming dividends

The yahoo finance package (yfinance) in python is very nice, and for example: msft = yf.ticker('MSFT') msft.dividends Will give ...
1 vote
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### Forward on a stock with Dividends

I have seen the question here and have gone through the answer, but I still don't fully understand why the approach below, based on no-arbitrage, yields a different answer. To summarize: At time $t_0$...
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### How should I decide the yield rate when calculate the spx implied volatility?

I am wondering how the industry decides the yield rate for a certain maturity when calculating the implied volatility for the SPX option. Is it just a simple linear interpolation from the two near ...
322 views

### Deriving the stochastic process for a dividend-yielding stock (under Black-Scholes assumptions)

In order to derive the Black-Scholes equation for a stock $S(t)$ yielding dividends at the continuous rate $d$ $$S(t) = S_0 e^{(\mu - d - \frac{\sigma^2}{2})t + \sigma \sqrt{t} N(0,1)} \text{,}$$ M. ...
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### Calendar arbitrage in implied vol grid with discrete and proportional dividends

I have an implied vol discrete grid, obtained from market data. To obtain prices from these implied vols, a dividend model with discrete and proportional dividends is used. How can I verify if there ...
349 views

### CRSP: Return including dividends

Using CRSP data, I tried to compute the historical returns (including dividends) of stocks according to Total Return = (adjprc + (divamt / cumfacpr / facpr)) / prev_adjprc – 1, where divamt is the ...
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### Understanding Walter's Dividend Policy Model

I'm trying to understand the justification for the mathematical formulation of the Walter model (1956), which provides an equation for the price of a stock based on present value of dividends and ...