# 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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### How to derive forward price on stock with continuous dividend

Let $F_{t,T}$ be the forward price of a stock $S$ at time $T$ and $t$ be the current time. The stock pays a proportional continuous dividend at a rate of $q$ and the risk-free rate is $r$. How can I ...
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### Implied dividend estimation

I am looking at two different ways of estimating the expected / implied dividends from market data. 1. Dividend futures I know that this asset class is not very liquid and might not be ...
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### GBM - How to make make annualized dividend reflected in one quarter

I want to simulate the price path of a stock for one quarter using geometric Brownian motion. The stock has a continuous dividend yield of 5% based on the annual dividend yield. However, historically ...
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### Implied vol and model calibration for an american option on a dividend paying stock - is there a market standard pricing model?

In terms of calibrating a pricing model to observed prices for American options on a dividend paying stock, is there a standard way of doing this in practice? My initial thought was to use CRR ...
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### Cochrane on Return Predictability

Being a lover of Sir Arthur Conan Doyle's work, I picked up a copy of Cochrane’s 2008 paper, The Dog That Did Not Bark: A Defense of Return Predictability and read: If returns are not predictable, ...
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### Implied Dividend from American Options (in practice)

I just tried to price the implied dividend for a few active, liquid options markets using current prices and I am not convinced my results are accurate. I am using American options, and using the put-...
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### Delta one trading: dependence on repo rate?

I have heard a delta-one trader mentioning the dependency of its activity on interest rates, dividend yields and repo rates. While I can understand the exposure he has to interest rates and dividend ...
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### What is the analogue used by Hull to price European calls with known cash dividends?

From The Book by Hull: And Hull's comment: This rule is analogous to the one developed in Section 14.12 for valuing a European option on a stock paying known cash dividends. (In that case we ...
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### Calculating annualized continuous dividend yield

What would be a formula for calculating the annualized continuous dividend yield of a stock? Given the quarterly or annual dividend
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